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KCB buy buy buy
Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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Is a Rights Issue imminent for KCB in 2018? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,641 Location: NAIROBI
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VituVingiSana wrote:
Is a Rights Issue imminent for KCB in 2018?
I don't think so;they will adjust and comply accordingly. The CEO Oigara said they have more than sufficient reserve which even gave them room to payout an interim dividend Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 8/27/2015 Posts: 138 Location: Harare
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VituVingiSana wrote:
Is a Rights Issue imminent for KCB in 2018?
It depends on how big their exposure is. There is a transitional phasing-in period proposed by Basel(and which I expect CBK to include in their implementation guidance) of spreading the effect within five years for the day one effect on core tier 1 capital. Investment philosophy development in progress...
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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alotoftalk wrote:VituVingiSana wrote:
Is a Rights Issue imminent for KCB in 2018?
It depends on how big their exposure is. There is a transitional phasing-in period proposed by Basel(and which I expect CBK to include in their implementation guidance) of spreading the effect within five years for the day one effect on core tier 1 capital. So KCB may not have sufficient Tier 1 Capital to cover their ratios if IFRS 9 was implemented in full on 1st Jan 2018? Where does it say that there is a 5-year "transitional phase-in" period? Aspects of the IFRS 9 could have been "early adopted" as done by DTB. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 8/27/2015 Posts: 138 Location: Harare
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VituVingiSana wrote:alotoftalk wrote:VituVingiSana wrote:
Is a Rights Issue imminent for KCB in 2018?
It depends on how big their exposure is. There is a transitional phasing-in period proposed by Basel(and which I expect CBK to include in their implementation guidance) of spreading the effect within five years for the day one effect on core tier 1 capital. So KCB may not have sufficient Tier 1 Capital to cover their ratios if IFRS 9 was implemented in full on 1st Jan 2018? Where does it say that there is a 5-year "transitional phase-in" period? Aspects of the IFRS 9 could have been "early adopted" as done by DTB. Because of the expected credit losses concept, it's quite possible that the impact may thin out their tier 1 capital. There are two aspects to the IFRS 9 implementation. The accounting and the regulatory. Good examples, tier one capital is not an accounting but regulatory aspect. Another example, the definition of a loan in default is also a regulatory aspect. Regulatory aspects are usually standardized for all banks based on concepts proposed by Basel and adopted by the regulator, in this case, CBK. Read more (start at pg. 27) about the regulatory transitional aspects here: https://www.esrb.europa...._stab_imp_IFRS_9.en.pdf
Investment philosophy development in progress...
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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alotoftalk wrote:VituVingiSana wrote:alotoftalk wrote:VituVingiSana wrote:
Is a Rights Issue imminent for KCB in 2018?
It depends on how big their exposure is. There is a transitional phasing-in period proposed by Basel(and which I expect CBK to include in their implementation guidance) of spreading the effect within five years for the day one effect on core tier 1 capital. So KCB may not have sufficient Tier 1 Capital to cover their ratios if IFRS 9 was implemented in full on 1st Jan 2018? Where does it say that there is a 5-year "transitional phase-in" period? Aspects of the IFRS 9 could have been "early adopted" as done by DTB. Because of the expected credit losses concept, it's quite possible that the impact may thin out their tier 1 capital. There are two aspects to the IFRS 9 implementation. The accounting and the regulatory. Good examples, tier one capital is not an accounting but regulatory aspect. Another example, the definition of a loan in default is also a regulatory aspect. Regulatory aspects are usually standardized for all banks based on concepts proposed by Basel and adopted by the regulator, in this case, CBK. Read more (start at pg. 27) about the regulatory transitional aspects here: https://www.esrb.europa...._stab_imp_IFRS_9.en.pdf
Thank you. What's the (significant) accounting aspect of IFRS 9? Weren't the SLRs a result of CBK's more stringent prudential guidelines? Doesn't the more stringent of the 2 standards apply i.e. PG vs IFRS 9? Will SLRs remains in place on 1st Jan 2018? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,641 Location: NAIROBI
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@vvs No need kujistress. Just wait for the CBK guidelines and see whether KCB will be compliant Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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Ericsson wrote:@vvs No need kujistress. Just wait for the CBK guidelines and see whether KCB will be compliant When are these expected to be out? [It's almost end of 3Q] Doesn't ICPAK have a say? In light of IFRS 9, I am staying away from KCB when there are other options eg NIC, Equity and I&M Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,641 Location: NAIROBI
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@vvs Isorite You've never been on KCB and a fan. I can bet you kcb will not be that affected as you think. Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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Ericsson wrote:@vvs Isorite You've never been on KCB and a fan. I can bet you kcb will not be that affected as you think. It's a SIFI hence my concern just like I worry about KQ being subsidized by taxpayers like me. I don't want Taxpayer cash being used to subsidize [low ROE] KCB either when I would rather re-invest my own money instead of GoK borrowing or increasing taxes. Plus what does this say about KCB's lending policies? BTW, check this out http://www.businessdaily...7088-rca47gz/index.html
Good luck re: KCB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,641 Location: NAIROBI
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@vvs Have you also had a look at the borrowings by equity. What the other banks have is a dwarf. There is more to look at than the IFRS9. On the issue of taxpayers money being used to bailout kcb;has it started making losses or unable to meet debt covenants Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Member Joined: 8/27/2015 Posts: 138 Location: Harare
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VituVingiSana wrote:alotoftalk wrote:VituVingiSana wrote:alotoftalk wrote:VituVingiSana wrote:
Is a Rights Issue imminent for KCB in 2018?
It depends on how big their exposure is. There is a transitional phasing-in period proposed by Basel(and which I expect CBK to include in their implementation guidance) of spreading the effect within five years for the day one effect on core tier 1 capital. So KCB may not have sufficient Tier 1 Capital to cover their ratios if IFRS 9 was implemented in full on 1st Jan 2018? Where does it say that there is a 5-year "transitional phase-in" period? Aspects of the IFRS 9 could have been "early adopted" as done by DTB. Because of the expected credit losses concept, it's quite possible that the impact may thin out their tier 1 capital. There are two aspects to the IFRS 9 implementation. The accounting and the regulatory. Good examples, tier one capital is not an accounting but regulatory aspect. Another example, the definition of a loan in default is also a regulatory aspect. Regulatory aspects are usually standardized for all banks based on concepts proposed by Basel and adopted by the regulator, in this case, CBK. Read more (start at pg. 27) about the regulatory transitional aspects here: https://www.esrb.europa...._stab_imp_IFRS_9.en.pdf
Thank you. What's the (significant) accounting aspect of IFRS 9? Weren't the SLRs a result of CBK's more stringent prudential guidelines? Doesn't the more stringent of the 2 standards apply i.e. PG vs IFRS 9? Will SLRs remains in place on 1st Jan 2018? The significant accounting aspect is recognition of the 12-months expected credit losses immediately a loan/credit is issued (including guarantees, credit cards etc). IAS 39 focused on impairment after the default event while IFRS 9 is the expected losses even before the default event. The SLRs are a regulatory concept. Basel III still has this option open. So CBK's guidance is what's ultimately key though it will be a mirror of Basel rules. Based on Basel the excess provisions still count towards tier 2 capital subject to a max of 0.6% (or as set by the regulator) of CRWA during the transitional phase. Read more http://www.bis.org/bcbs/publ/d401.pdfInvestment philosophy development in progress...
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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Ericsson wrote:@vvs Have you also had a look at the borrowings by equity. What the other banks have is a dwarf. There is more to look at than the IFRS9. On the issue of taxpayers money being used to bailout kcb;has it started making losses or unable to meet debt covenants Bailouts creep on a firm. KCB was (fake) super profitable in the 90s. Then came the HUGE write-offs. Then GoK had to pump in cash [while CBK looked the other way re: ratios] into KCB. Enough said. No-one incl Equity should be given Taxpayer bailouts... In the event of a bailout, the current shareholders should be wiped out. All banks should be made to follow IFRS 9 to the letter. Other bailouts [call them any name you like] include KPLC [debt converted to equity], KenGen [debt converted to equity], KQ [Rights Issue and debt to equity conversion], ARM [private bailout], Britam [private bailout], etc Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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alotoftalk wrote:VituVingiSana wrote:alotoftalk wrote:VituVingiSana wrote:alotoftalk wrote:VituVingiSana wrote:
Is a Rights Issue imminent for KCB in 2018?
It depends on how big their exposure is. There is a transitional phasing-in period proposed by Basel(and which I expect CBK to include in their implementation guidance) of spreading the effect within five years for the day one effect on core tier 1 capital. So KCB may not have sufficient Tier 1 Capital to cover their ratios if IFRS 9 was implemented in full on 1st Jan 2018? Where does it say that there is a 5-year "transitional phase-in" period? Aspects of the IFRS 9 could have been "early adopted" as done by DTB. Because of the expected credit losses concept, it's quite possible that the impact may thin out their tier 1 capital. There are two aspects to the IFRS 9 implementation. The accounting and the regulatory. Good examples, tier one capital is not an accounting but regulatory aspect. Another example, the definition of a loan in default is also a regulatory aspect. Regulatory aspects are usually standardized for all banks based on concepts proposed by Basel and adopted by the regulator, in this case, CBK. Read more (start at pg. 27) about the regulatory transitional aspects here: https://www.esrb.europa...._stab_imp_IFRS_9.en.pdf
Thank you. What's the (significant) accounting aspect of IFRS 9? Weren't the SLRs a result of CBK's more stringent prudential guidelines? Doesn't the more stringent of the 2 standards apply i.e. PG vs IFRS 9? Will SLRs remains in place on 1st Jan 2018? The significant accounting aspect is recognition of the 12-months expected credit losses immediately a loan/credit is issued (including guarantees, credit cards etc). IAS 39 focused on impairment after the default event while IFRS 9 is the expected losses even before the default event. The SLRs are a regulatory concept. Basel III still has this option open. So CBK's guidance is what's ultimately key though it will be a mirror of Basel rules. Based on Basel the excess provisions still count towards tier 2 capital subject to a max of 0.6% (or as set by the regulator) of CRWA during the transitional phase. Read more http://www.bis.org/bcbs/publ/d401.pdf Very informative. If the regulator has so much leeway "...subject to a max of 0.6% (or as set by the regulator)" then isn't Basel III just a guideline at best i.e. banks may not be adequately capitalized in some countries even if they meet the local guidelines. "What is the impact of provisions on regulatory capital? The current regulatory treatment of General and Specific Provisions depends on whether a bank uses the Standardised approach or Internal Ratings Based (IRB) approach for calculating regulatory capital. Standardised approach: Exposures are measured net of specific provisions and gross of general provisions for calculating capital requirements. Further, Banks are permitted to include general provisions in Tier 2 capital up to a limit of 1.25% of credit risk weighted assets (RWAs). Specific provisions do not qualify for inclusion in Tier 2 capital. IRB approaches: All exposures are measured gross of specific provisions and partial write-offs. The Basel II framework defines “total eligible provisions” under the IRB approaches as the sum of all provisions (e.g. specific provisions, partial write-offs and portfolio-specific general provisions such as country risk provisions or general provisions) that are attributed to exposures treated under the IRB approaches including any discounts on defaulted assets. Under the IRB approaches, any shortfall between total eligible provisions and regulatory expected loss (EL) is deducted from Common Equity Tier 1 (CET1) capital, whereas any excess is added to Tier 2 capital, up to a limit of 0.6% of credit RWAs calculated under the IRB approach. Under IFRS 9, a rise in impairment depletes the capital adequacy of banks that use the Standardised approach to credit risk, as the 1:1 reduction in capital arising from increased impairments is not offset by reduced RWAs. The result is less clear-cut for IRB banks, reflecting the more complex relationship between impairment and the outcomes of the IRB capital formula. A further complication for IRB banks will arise from the implementation of capital floors based on Standardised RWAs, as IFRS 9 is a further factor in the assessment of whether or not the floor will be binding. These impacts could be particularly marked in a stress, which could result in banks requiring additional capital to cover potential downturn impacts." Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,641 Location: NAIROBI
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@vvs We wait and see. Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 4/4/2016 Posts: 1,996 Location: Kitale
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I dont expect KCB ratios to come down anytime soon.In the last two years,the bank has made good efforts to address the same through scrip dividend and a long term loan secured from abroad with flexible terms. Progress are underway to acquire NBK which will further strengthen the liquidity ratios of the bank.I expect this takeover to completely seal any fear of a looming thinning ratios. Towards the goal of financial freedom
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Rank: Elder Joined: 12/4/2009 Posts: 10,641 Location: NAIROBI
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Ebenyo wrote:I dont expect KCB ratios to come down anytime soon.In the last two years,the bank has made good efforts to address the same through scrip dividend and a long term loan secured from abroad with flexible terms. Progress are underway to acquire NBK which will further strengthen the liquidity ratios of the bank.I expect this takeover to completely seal any fear of a looming thinning ratios.
KCB will probably do a rights issue to acquire and restructure/recapitalise NBK. Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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Ericsson wrote:Ebenyo wrote:I dont expect KCB ratios to come down anytime soon.In the last two years,the bank has made good efforts to address the same through scrip dividend and a long term loan secured from abroad with flexible terms. Progress are underway to acquire NBK which will further strengthen the liquidity ratios of the bank.I expect this takeover to completely seal any fear of a looming thinning ratios.
KCB will probably do a rights issue to acquire and restructure/recapitalise NBK. A good excuse to recapitalize the whole bank to meet IFRS 9 requirements by using NBK as the red herring. BTW, I wonder if NBK, in its current state, will meet IFRS 9's requirements. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,641 Location: NAIROBI
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VituVingiSana wrote:Ericsson wrote:Ebenyo wrote:I dont expect KCB ratios to come down anytime soon.In the last two years,the bank has made good efforts to address the same through scrip dividend and a long term loan secured from abroad with flexible terms. Progress are underway to acquire NBK which will further strengthen the liquidity ratios of the bank.I expect this takeover to completely seal any fear of a looming thinning ratios.
KCB will probably do a rights issue to acquire and restructure/recapitalise NBK. A good excuse to recapitalize the whole bank to meet IFRS 9 requirements by using NBK as the red herring. BTW, I wonder if NBK, in its current state, will meet IFRS 9's requirements. Eish uko na beef/chuki na kcb kuhusu IFRS9 Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,057 Location: Nairobi
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Ericsson wrote:VituVingiSana wrote:Ericsson wrote:Ebenyo wrote:I dont expect KCB ratios to come down anytime soon.In the last two years,the bank has made good efforts to address the same through scrip dividend and a long term loan secured from abroad with flexible terms. Progress are underway to acquire NBK which will further strengthen the liquidity ratios of the bank.I expect this takeover to completely seal any fear of a looming thinning ratios.
KCB will probably do a rights issue to acquire and restructure/recapitalise NBK. A good excuse to recapitalize the whole bank to meet IFRS 9 requirements by using NBK as the red herring. BTW, I wonder if NBK, in its current state, will meet IFRS 9's requirements. Eish uko na beef/chuki na kcb kuhusu IFRS9 What @Obiero said to me about KQ! but believe what you want! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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