Ericsson wrote:lochaz-index wrote:Angelica _ann wrote:Results look good, better than Coop!!! JM knows his thing even during tough times.....
My thoughts too. Coop results were a tad disappointing and it looks like they have altogether missed their chance to overhaul Equity in the banking pecking order.
That said, there is a massive spike in Equity's NPLs...almost threefold. Though still below the industry's average, if the trend maintains that trajectory it will be a big worry going forward.
Also noted that in the post rate cap period, DTB's share price has performed the best and HF is the worst. Prudence being rewarded.
Coop results were commendable.They do not have many subsidiaries like Equity bank which provided a cushion to the slow down being experienced in Kenya.
Co-op bread and butter is kenya and a little bit in South Sudan
That is true but also besides the point. The shareholders interest is in the bottom line, ROA & ROE. How and where growth is achieved from is the management's job.
In the regulatory framework KE finds itself in, banks' subsidiaries performance and non funded income growth are critical in sustaining respectable returns. Equity is outperforming Coop on both fronts. In addition, Equity's growth of deposits - with a miniscule jump in interest expense - is clearly an outlier in the industry and puts them in good stead.
In the rate cap regime, statist banks(Nbk,Kcb,Coop etc) were handed a headstart against the more market/Wanjiku oriented banks like Equity. If they cannot harness that advantage to outperform the rest of the competition then there is a problem.
On the other hand, Equity has continued bulking up on the liquidity front. The question is why? Perhaps a change in its model? What do they aim to take advantage of by having such a malleable balance sheet?
The main purpose of the stock market is to make fools of as many people as possible.