KCB AGM 2019

Logistics.

Transport was provided as indicated in the AGM notice. I arrived at Kencom at around 0700hrs and contrary to my expectation buses were already there ferrying people to Kasarani. I had assumed that I will find one bus and maybe be among the few early birds. We got to Kasarani at around 0730hrs and registration had already began- Earlier than Indicated in the Agm notice. There were two queues- Ladies and gentlemen. The ladies queue was almost two times long. Does that mean they are more active in stock market or men are too busy to attend? We shall revisit that.


Shareholders Goodies

kcb branded polo shirt and a Naivas shopping voucher worth ksh 1000/=. Some people just registered and disappeared after being given the goodies.


Key Highlights

-Kenya remains the largest contributor to Groups profit after tax. In Fy2018 contribution stood at 93%.

-Continuous investment in fintech is the only way to stay ahead. Management will continue to invest in Fintech.

-International businesses collectively grew by 64% and together with KCB Insurance Agency and KCB capital are targeted to contribute at least 20% of the Group’s profit by 2020.

-Ethiopia isn’t an easy market but a delegation from KCB has held talks with the Ethiopian prime minister. Something is on the offing.

-The finance director was in Casablanca and met officials from Moroccan Lender- Banque Centrale Populaire (BCP). A possibility of partnership was discussed.


National Bank

-NBK non-performing loans are recoverable. To quote Oigara “the names (read defaulters) are not difficult to deal with”

-The problem with NBK has nothing to do with staff, it’s a management problem. And they don’t intend to keep the management.

-KCB is buying NBK at a 30% discount. Valuation was well done, a company (I forgot the name) was hired to do valuation and reported directly to the ceo.


EPS Projections post NBK Acquisition

YEAR EPS

2019- 7.58
2020- 8.37
2021- 10.16
2022- 11.32

Return on Equity Post NBK Acquisition

YEAR ROE (%)

2018- 23.0
2019- 25.2
2020- 25.2
2021- 25.4
2022- 26.5
2023- 26.9

The above projections are on the lower side.







Shareholders Hour.

1. Alois Chami- why is there heavy borrowing? Management assured us the heavy borrowing is quite in order and secure.

2.A shareholder asked the management to break down the figures under contingent liability. Ceo said they are not under any regulation to disclose the figures. Shareholders booed him giving the guy morale. He pressed further, and a tensed Oigara had to shed light on contingency liability. Basically it’s all about KRA vs. KCB on excise duty. The amount in contention is around 300mn.

3.On Nys saga they said they have tightened their guidelines and trained staff on KYC, AML/CFT promised no repeat of the same. And of course they were sorry.

4.One shareholder asked why Cs finance is paid sitting allowance yet he is representing the government hence a public servant. Does that not amount to double payment? Management said they are just following the set regulations however there are some monthly fees which are payable to National treasury.

5.A shareholder sought to know why they didn’t buy chase bank despite being front runners. Management said it was impossible since they were the administrators and buying it would amount to conflict of interest.

6.On imperial bank one shareholder sought to know why they are not buying everything. Management said they looked at the quality of assets and only the branches that they are buying met their criteria.










Crazy Moments.

-A lady told us to give KCB choir some applause because they had sang well. She went ahead and sang a song praising KCB Group.

-Chami told us to open page two of the Annual report and clap for the management because of the phrase “go ahead, take the region to greater heights”

-A mzee who had travelled all the way from Nanyuki told us the best way to define NBK management rot is to look at NBK Nanyuki which is housed in a dilapidated building. Last painted in 1976.

Sundry

Over the weekend I came across Equity bank’s Agm video on youtube, and I noticed familiar faces which I had seen during KCB AGM. BBK held its agm the previous day before KCB’s and I overheard “ala kumbe huko huku pia” not more than once. Actually what happened during BBK AGM was discussed in queues and on our way back. I hear management had difficult time trying to explain Why always Barclays (Nys, fake currency, ATM theft). I concluded there is a clique of Kenyans who are regulars at these AGMs.

The young people holding them shares and with vast financial accounting are at work in the office or hustling at that time of the AGM.

Bring the funding bwana VVS. Next should be Centum.

Good report. Continue with the good work.

Let it stay as unclaimed asset for sometime. Hope it wont expire.