Conversion of loans [given to KCB] to equity would have to go through a conversion process so I do not think that is on the cards at the moment. For now, KCB wants Tier 2 loans to shore up its capital.

My gut feeling... It is a matter of time before KCB will be forced to take write-downs and provisions for some of its loans. I think KCB wants to get the Tier 2 loans in place, cut back on dividends [scrip issue] and perhaps a Rights Issue BEFORE the NPLs are booked and provisions taken. Time frame 12 months ie FY 2017. The excuse can be the elections were bad for business.

Exactly! The same goes for most banks save for a prudent few. Banks have had a fine run in terms of their loan book for close to 15 years. A washout is way overdue. This makes it a question of when (not if) to take the hit/heat on their earnings through charge offs. My money is on FY 2017 being the real shocker with or without both the rate caps and the election.

For tier III and IV banks, even FY 2016 will be bad. The big boys can stay the execution a while longer but sooner or later the chicken will come home to roost.

The BIG cause for all being discussed above is that our economy is bleeding/suffering.
Job losses,weakening spending power,corruption

As smaller banks falter, does the money move to Timbuktu or to the local larger banks

So you reckon that a bigger deposit base for the big boys will continually result in growing EPS figures?