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KCB buy buy buy
Ebenyo
#901 Posted : Wednesday, October 04, 2017 2:20:31 PM
Rank: Veteran


Joined: 4/4/2016
Posts: 927
Location: Kitale
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.



That can happen and it will be used to clean the mess at NBK.once its clear,then the fears of @VVS will not be there.NBK will be part of KCB BANK GROUP PLC.I expect it to be more profitable and add value to the company.
1.Cut down on expenses2.Save a portion of the income 3.Invest heavily
lochaz-index
#902 Posted : Wednesday, October 04, 2017 4:43:08 PM
Rank: Member


Joined: 9/18/2014
Posts: 706
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.

No chance NBK complies with IFRS9...it has already fallen afoul of the prudential guidelines which structurally has similar mechanics to to IFRS9.
The main purpose of the stock market is to make fools of as many people as possible.
lochaz-index
#903 Posted : Wednesday, October 04, 2017 6:14:51 PM
Rank: Member


Joined: 9/18/2014
Posts: 706
VituVingiSana wrote:
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."

I don't think there is any bank which will be spared a shaving by the new regulations. Basel III guidelines have been wrecking havoc on European Banks that were caught flatfooted...used in conjunction with IFRS9, Kenyan banks should be bulking up on both the regulatory and accounting buffers to withstand the changes. Basel IV has been in the works for sometime now though I am not sure about the implementation timeline.

The new regulations will bring about varied consequences:
1. Expected loss approach will surely shorten the loan loss provision gestation from recognition to total write off (more prudence required from the banks) aka reduced carrying period for non-performing assets.

2. IFRS9 introduces a macro concept to recognition of non performing assets in addition to borrower specific risk upon default. Prudential guidelines captured a bit of this but not in its entirety. Sectoral/industry risk will now be incorporated in the gross/general provisions as per the prevailing economic conditions. This again calls for balance in the banks' loan books. If say real estate sector is under the weather as opposed to agricultural or manufacturing sectors, higher general provisions will be required in the former. Maybe country risk could be factored in as time goes by.

3. Apparently loans to govt institutions will be subject to provisions for inspite of state guarantees and the generally accepted norm of the state being 'risk free'.

4. For borrowers with multiple facilities with the same or different banks, cross default risk must be recognised (both intra and inter-bank). If one facilities falls in arrears, the bank(s) will take a hit across board.

5. Doing away with SLLR's means less room for massaging the P&L.

For tier III and IV banks which are already feeling the heat from the interest caps and deteriorating economic conditions, the adoption of IFRS9 regulations couldn't have been more ill-timed.
The main purpose of the stock market is to make fools of as many people as possible.
obiero
#904 Posted : Thursday, October 05, 2017 7:15:45 AM
Rank: Elder


Joined: 6/23/2009
Posts: 7,116
Location: nairobi
Ebenyo wrote:
obiero wrote:
Horton wrote:
Ericsson wrote:
Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify
one thing that's certain is that there's uncertainty at the NSE and stocks hate uncertainty
obiero
#905 Posted : Monday, October 09, 2017 5:45:03 PM
Rank: Elder


Joined: 6/23/2009
Posts: 7,116
Location: nairobi
obiero wrote:
Ebenyo wrote:
obiero wrote:
Horton wrote:
Ericsson wrote:
Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify

KCB touches KES 39 today, I keep telling you guys financial services industry is gonna derail in the near term.. http://live.mystocks.co.ke/m/stock=KCB
one thing that's certain is that there's uncertainty at the NSE and stocks hate uncertainty
watesh
#906 Posted : Monday, October 09, 2017 7:37:36 PM
Rank: Member


Joined: 8/10/2014
Posts: 574
Location: Kenya
obiero wrote:
obiero wrote:
Ebenyo wrote:
obiero wrote:
Horton wrote:
[quote=Ericsson]Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify

KCB touches KES 39 today, I keep telling you guys financial services industry is gonna derail in the near term.. http://live.mystocks.co.ke/m/stock=KCB[/quote]
I buy for dividend purposes, this is a very tasty price. Highly unlikely to reduce from the 3 bob a share
obiero
#907 Posted : Monday, October 09, 2017 9:20:07 PM
Rank: Elder


Joined: 6/23/2009
Posts: 7,116
Location: nairobi
watesh wrote:
obiero wrote:
obiero wrote:
Ebenyo wrote:
obiero wrote:
Horton wrote:
[quote=Ericsson]Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify

KCB touches KES 39 today, I keep telling you guys financial services industry is gonna derail in the near term.. http://live.mystocks.co.ke/m/stock=KCB[/quote]
I buy for dividend purposes, this is a very tasty price. Highly unlikely to reduce from the 3 bob a share

Trust me, it could reduce to KES 2
one thing that's certain is that there's uncertainty at the NSE and stocks hate uncertainty
Ebenyo
#908 Posted : Monday, October 09, 2017 10:26:25 PM
Rank: Veteran


Joined: 4/4/2016
Posts: 927
Location: Kitale
obiero wrote:
watesh wrote:
obiero wrote:
obiero wrote:
Ebenyo wrote:
obiero wrote:
Horton wrote:
[quote=Ericsson]Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify

KCB touches KES 39 today, I keep telling you guys financial services industry is gonna derail in the near term.. http://live.mystocks.co.ke/m/stock=KCB[/quote]
I buy for dividend purposes, this is a very tasty price. Highly unlikely to reduce from the 3 bob a share

Trust me, it could reduce to KES 2


hio ni ndoto ya mchana.Kcb is fundamentally too strong for that kind of wish.Its this political situation and the moody downgrade that has caused the share price to behave that way.As soon as political situation calm down,the process of acquiring NBK will be completed.Kcb will be trading at 50-60 afterwards.If you have money now,dont waste this opportunity.Buy at this price which is a discount.
1.Cut down on expenses2.Save a portion of the income 3.Invest heavily
VituVingiSana
#909 Posted : Monday, October 09, 2017 11:45:49 PM
Rank: Chief


Joined: 1/3/2007
Posts: 13,306
Location: Nairobi
obiero wrote:
watesh wrote:
obiero wrote:
obiero wrote:
Ebenyo wrote:
obiero wrote:
Horton wrote:
[quote=Ericsson]Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify

KCB touches KES 39 today, I keep telling you guys financial services industry is gonna derail in the near term.. http://live.mystocks.co.ke/m/stock=KCB[/quote]
I buy for dividend purposes, this is a very tasty price. Highly unlikely to reduce from the 3 bob a share

Trust me, it could reduce to KES 2

I am not a fan of KCB [wait until IFRS 9 kicks in] but "trust me" is an interesting one... Look at your calls on KQ. d'oh! d'oh! d'oh!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
obiero
#910 Posted : Tuesday, October 10, 2017 6:55:39 AM
Rank: Elder


Joined: 6/23/2009
Posts: 7,116
Location: nairobi
VituVingiSana wrote:
obiero wrote:
watesh wrote:
obiero wrote:
obiero wrote:
Ebenyo wrote:
obiero wrote:
Horton wrote:
[quote=Ericsson]Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify

KCB touches KES 39 today, I keep telling you guys financial services industry is gonna derail in the near term.. http://live.mystocks.co.ke/m/stock=KCB[/quote]
I buy for dividend purposes, this is a very tasty price. Highly unlikely to reduce from the 3 bob a share

Trust me, it could reduce to KES 2

I am not a fan of KCB [wait until IFRS 9 kicks in] but "trust me" is an interesting one... Look at your calls on KQ. d'oh! d'oh! d'oh!

I would have replied harshly but ever since I found out you are over 60 years old, I discovered a new level of respect
one thing that's certain is that there's uncertainty at the NSE and stocks hate uncertainty
Ebenyo
#911 Posted : Tuesday, October 10, 2017 10:17:36 AM
Rank: Veteran


Joined: 4/4/2016
Posts: 927
Location: Kitale
obiero wrote:
VituVingiSana wrote:
obiero wrote:
watesh wrote:
obiero wrote:
obiero wrote:
Ebenyo wrote:
obiero wrote:
Horton wrote:
[quote=Ericsson]Obiero I salute you for the prediction you made about KCB.
True to your word it has exploded



Na bado!
@obiero curious did u buy any? Dont see it on ur signature

@ericsson asante.. I always put people in the correct buses. @horton No. I did not.. All my bets are on KQ in 2017.. Planning to offload COOP to purchase some additional KQ



Testify

KCB touches KES 39 today, I keep telling you guys financial services industry is gonna derail in the near term.. http://live.mystocks.co.ke/m/stock=KCB[/quote]
I buy for dividend purposes, this is a very tasty price. Highly unlikely to reduce from the 3 bob a share

Trust me, it could reduce to KES 2

I am not a fan of KCB [wait until IFRS 9 kicks in] but "trust me" is an interesting one... Look at your calls on KQ. d'oh! d'oh! d'oh!

I would have replied harshly but ever since I found out you are over 60 years old, I discovered a new level of respect


smile Na sioni akipenda stocks za wazee ya hio age kama BAT,EABL na BOC.naona anapenda stocks za vijana kama Equity,Kenol na Nic.inaweza kuwa hajafikisha hio umri.
1.Cut down on expenses2.Save a portion of the income 3.Invest heavily
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