BY LOLA OKULO THE local banking sector recorded a 20.5 per cent pre tax prot last year to stand at Sh89.5 billion com- pared to 2010 boosted by increased loans, the latest data by the Central Bank shows. According to the Banking Supervision annual report released by CBK on Friday, gross loans grew by 30.2 per cent from Sh914.9 bil- lion in December 2010 to Sh1.2 trillion as at Decem- ber 2011. This is despite the high cost of loans due to a tight monetary measures within that period aimed at tam- ing ination that forced the CBK to increase its key lending rate to 18 per cent. “This performance was underpinned by adoption of cost effective delivery channels and regional ex- pansion,” said CBK gover- nor Njuguna Ndung’u in a statement. Increased appraisal stand- ards for loan applications led to a reduction in ratio of non-performing loans to gross loans which improved from 6.3 per cent registered in 2010 to 4.4 per cent in 2011. Last year, there were over 1.3 million credit reports accessed by banks from the two licensed credit refer- ence bureaus prior to loan processing and over 6,000 credit reports accessed by individuals. The asset base of the sec- tor increased by 20.2 per cent from Sh1.68 trillion to Sh2.02 trillion over the period. Out of the 44 reg- istered banks in Kenya, 27 local commercial banks ac- counted for 60 per cent of the industry’s total assets. On the other hand, 13 foreign owned commercial banks accounted for 35.2 per cent of the industry’s total assets. Customer de- posits grew by 20.2 per cent to stand at Sh1.49 trillion attributed to increased de- posit mobilization by banks through various market campaigns and opening of new branches to tap new account holders. The number of bank branches increased by 98 from 1,063 in 2010 to 1,161 with Nairobi registering the highest number of branches representing 40 per cent of the total branches. The use of agents by banks also contributed to increased mobilisation of deposits, the survey indicated. Increased access to nan- cial services pushed up the number of deposit accounts from 11.8 million to 14.3 million last year. However out of the 44 banks, only eight have rolled out agent networks and among them they have contracted a total of 9,748 active agents facilitating over 8 million transactions valued at Sh43.6 billion. This translates to a mere 3 per cent of the industry’s total deposits. Going forward, Ndung’u said that CBK would look at more ways to reduce the cost of banking services to encourage more borrowing and saving. “The sector’s growth momentum is expected to be supported by continued adoption of innovative and cost effective channels of of- fering nancial services by banks coupled with region- al expansion among other initiatives,” said Ndung’u. 36 LOCAL THE STAR Monday, May 28, 2012 Can YOU outsmart the expert? BY STAR REPORTER TWENTY six year old Eric Muthomi is the win- ner of the Jitihada busi- ness plan competition that targets innovative ideas that can boost economic growth. Muthomi’s company, Stawi Food and Fruits Limited, has been awarded one million shillings in the competition conducted as part of the Micro, Small and Medium Enterprises Competitiveness Project of the Ministry of Industriali- zation. Based in Meru, the company processes green bananas into banana our that can be used in baking, making porridge, ugali, soup and mashed food. The business has em- ployed ve permanent staff for sales, quality control, accounting and store keeping and another 20 on casual basis. “I started the company after seeing bananas rot in the farms due to lack of markets. My intention was to buy the bananas from farmers and proc- ess them into a nutritious product, after which they would earn incomes,” he said. The chief Judge of the competition Kent Libisu said the business idea is unique as it incorporates value addition, com- mercial viability because of its food security promotion, employment provision and market for surplus agricultural produce. Young flour maker wins business competition + business UP TO DATE, ACCURATE BUSINESS INFORMATION NEWS YOU CAN USE, EVERY DAY Banks 2011 profits up by 20.5% – CBK ALY KHAN’S STAR PORTFOLIO SCANGROUP’S share price has rallied 264.35% since September 2006. The total return since Sep- tember 2006 has been 294.88%. The NSE20 Index has retreated 20.94% over the exact same period. Therefore, ScanGroup has outperformed the bench- mark index by 315.82% over that period. The annualised return has been 27.42%. Scan- Group has a market capitalisation of Sh14.951 billion, which is $175.378 million. Today, Sir Martin Sorrell’s WPP is the biggest shareholder with just over 33%. Bharat Thakrar was my guest at Mindspeak on Saturday. I spend a great deal of my time, studying share of voice and the viral world and on Friday, I told Bharat via sms [He was wait- ing to catch his flight back from Lagos and is evi- dently staking out a forward position in West Africa and in fact all points across Sub Saharan Africa] that I never knew he was quite the viral phenomenon. Interest was sky high. Actually, Bharat Thakrar’s Mindspeak was second only to President Yoweri Museveni’s in its share of voice and recall, there was major drama when President Museveni came. His erstwhile physician and recent nemesis was in a Nairobi hospital that same weekend that President Museveni came to Mindspeak. To rank second to M7, is no small thing. Let me track back to the world of advertising. ScanGroup has been a consolidator extraordinaire. Bharat used his share like a currency, with which to buy out many ‘mom and pop’ Operators. He created scale. His game plan was modelled on WPP’s, who did the very same thing except on a bigger canvas. This Year, I have met the CEOs of Coca Cola and Dow Chemical in London amongst many others here in Nairobi. The global multinationals have discovered Africa in a big way. They are seeking to increase their mind- share in one billion [2b in 2050] Africans’ minds. This is a rising tide and Bharat has his surf board and in my mind’s eye, I see him on the crest of a wave. By the way [and no offence to anyone] but his din- ner invitation is surely the most valuable in Nairobi. He is an epicurean, his dinner table is worthy of three Michelin Stars. I had a wonderful holiday in California some years ago. We hired a car and drove along California’s Pa- cific Coast Highway, which is an exhilirating drive. Bharat is the sort of fellow with whom I think i would have a great deal of fun, driving along such a Road, the top down, the wind in our hair [ok, his]. Today ScanGroup is looking to open in Nigeria, Angola, Mozambique. These are not shallow waters. I reckon he can grow ScanGroup another five times from here. He is in pole position. Shares go up and down and readers are advised that this column represents Mr Satchu’s personal opinions. SCANGROUP SETS PACE IN ADVERTISING GROWTH : Customers on a queue at a Bank in Mombasa. Bank profits shot up last year according to the latest CBK report. Photo/FILE
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BY LOLA OKULO
THE local banking sector recorded a 20.5 per cent pre tax pro!t last year to stand at Sh89.5 billion com-pared to 2010 boosted by increased loans, the latest data by the Central Bank shows.
According to the Banking Supervision annual report released by CBK on Friday, gross loans grew by 30.2 per cent from Sh914.9 bil-lion in December 2010 to Sh1.2 trillion as at Decem-ber 2011.
This is despite the high cost of loans due to a tight monetary measures within that period aimed at tam-ing in"ation that forced the CBK to increase its key lending rate to 18 per cent.
“This performance was underpinned by adoption of cost effective delivery
channels and regional ex-pansion,” said CBK gover-nor Njuguna Ndung’u in a statement.
Increased appraisal stand-ards for loan applications led to a reduction in ratio of non-performing loans to gross loans which improved from 6.3 per cent registered in 2010 to 4.4 per cent in 2011.
Last year, there were over 1.3 million credit reports accessed by banks from the two licensed credit refer-ence bureaus prior to loan processing and over 6,000 credit reports accessed by individuals.
The asset base of the sec-tor increased by 20.2 per cent from Sh1.68 trillion to Sh2.02 trillion over the period. Out of the 44 reg-istered banks in Kenya, 27 local commercial banks ac-counted for 60 per cent of
the industry’s total assets.On the other hand, 13
foreign owned commercial banks accounted for 35.2 per cent of the industry’s total assets. Customer de-posits grew by 20.2 per cent to stand at Sh1.49 trillion attributed to increased de-posit mobilization by banks through various market campaigns and opening of new branches to tap new account holders.
The number of bank branches increased by 98 from 1,063 in 2010 to 1,161 with Nairobi registering the highest number of branches representing 40 per cent of the total branches. The use of agents by banks also contributed to increased mobilisation of deposits, the survey indicated.
Increased access to !nan-cial services pushed up the number of deposit accounts
from 11.8 million to 14.3 million last year.
However out of the 44 banks, only eight have rolled out agent networks and among them they have contracted a total of 9,748 active agents facilitating over 8 million transactions valued at Sh43.6 billion. This translates to a mere 3 per cent of the industry’s total deposits.
Going forward, Ndung’u said that CBK would look at more ways to reduce the cost of banking services to encourage more borrowing and saving.
“The sector’s growth momentum is expected to be supported by continued adoption of innovative and cost effective channels of of-fering !nancial services by banks coupled with region-al expansion among other initiatives,” said Ndung’u.
36 LOCAL THE STAR Monday, May 28, 2012
Can YOU outsmart the expert?
BY STAR REPORTER
TWENTY six year old Eric Muthomi is the win-ner of the Jitihada busi-ness plan competition that targets innovative ideas that can boost economic growth.
Muthomi’s company, Stawi Food and Fruits Limited, has been awarded one million shillings in the
competition conducted as part of the Micro, Small and Medium Enterprises Competitiveness Project of the Ministry of Industriali-zation.
Based in Meru, the company processes green bananas into banana "our that can be used in baking, making porridge, ugali, soup and mashed food.
The business has em-
ployed !ve permanent staff for sales, quality control, accounting and store keeping and another 20 on casual basis.
“I started the company after seeing bananas rot in the farms due to lack of markets. My intention was to buy the bananas from farmers and proc-ess them into a nutritious product, after which they
would earn incomes,” he said.
The chief Judge of the competition Kent Libisu said the business idea is unique as it incorporates value addition, com-mercial viability because of its food security promotion, employment provision and market for surplus agricultural produce.
Young flour maker wins business competition
business UP TO DATE, ACCURATE BUSINESS INFORMATIONNEWS YOU CAN USE, EVERY DAY
Banks 2011 profits up by 20.5% – CBKALY KHAN’S
STARPORTFOLIO
SCANGROUP’S share price has rallied 264.35% since September 2006. The total return since Sep-tember 2006 has been 294.88%. The NSE20 Index has retreated 20.94% over the exact same period. Therefore, ScanGroup has outperformed the bench-mark index by 315.82% over that period.
The annualised return has been 27.42%. Scan-Group has a market capitalisation of Sh14.951 billion, which is $175.378 million. Today, Sir Martin Sorrell’s WPP is the biggest shareholder with just over 33%.
Bharat Thakrar was my guest at Mindspeak on Saturday. I spend a great deal of my time, studying share of voice and the viral world
and on Friday, I told Bharat via sms [He was wait-ing to catch his flight back from Lagos and is evi-dently staking out a forward position in West Africa and in fact all points across Sub Saharan Africa] that I never knew he was quite the viral phenomenon.
Interest was sky high. Actually, Bharat Thakrar’s Mindspeak was second only to President Yoweri Museveni’s in its share of voice and recall, there was major drama when President Museveni came.
His erstwhile physician and recent nemesis was in a Nairobi hospital that same weekend that President Museveni came to Mindspeak. To rank second to M7, is no small thing.
Let me track back to the world of advertising. ScanGroup has been a consolidator extraordinaire. Bharat used his share like a currency, with which to buy out many ‘mom and pop’ Operators. He created scale. His game plan was modelled on WPP’s, who did the very same thing except on a bigger canvas.
This Year, I have met the CEOs of Coca Cola and Dow Chemical in London amongst many others here in Nairobi.
The global multinationals have discovered Africa in a big way. They are seeking to increase their mind-share in one billion [2b in 2050] Africans’ minds.
This is a rising tide and Bharat has his surf board and in my mind’s eye, I see him on the crest of a wave.
By the way [and no offence to anyone] but his din-ner invitation is surely the most valuable in Nairobi. He is an epicurean, his dinner table is worthy of three Michelin Stars.
I had a wonderful holiday in California some years ago. We hired a car and drove along California’s Pa-cific Coast Highway, which is an exhilirating drive.
Bharat is the sort of fellow with whom I think i would have a great deal of fun, driving along such a Road, the top down, the wind in our hair [ok, his].
Today ScanGroup is looking to open in Nigeria, Angola, Mozambique. These are not shallow waters.
I reckon he can grow ScanGroup another five times from here. He is in pole position.
Shares go up and down and readers are advised that this column represents Mr Satchu’s personal opinions.
SCANGROUP SETS PACE IN ADVERTISING
GROWTH : Customers on a queue at a Bank in Mombasa. Bank profits shot up last year according to the latest CBK report.
Photo/FILE
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