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Titans of the Banking Industry
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Hello 👋🏿 It's Brian from The Kenyan Wall Street.
I hope you're having a great week so far…
In today's newsletter, we analyse the trends in the growth of asset size, profitability, and share price of different NSE-listed banks in Kenya. We also look at Kenya’s decision to buy back the Eurobond for US$900 million and why?
This and more business stories in today's edition…
ANALYSIS
Listed Banks Dominate NSE, Soar 311%
How asset sizes of different NSE-listed banks have grown since 2006
Between 2006 and 2024, the market capitalization of listed banks on the Nairobi Securities Exchange (NSE) grew by 311.5%, as they outperformed unlisted peers due to better access to capital and stronger investor confidence. Listing on the NSE enabled these banks to expand, embrace digital transformation, and withstand economic shocks by raising funds through public markets. Regulatory reforms now require banks to increase their minimum core capital to KES 10 billion by 2029, giving listed banks an advantage as smaller banks face potential mergers or acquisitions. Equity Group Holdings Plc emerged as the top performer, with a 5,117% revenue increase and a 236% capital gain since its listing. The sector’s total net assets grew from KES 755.3 billion in 2006 to KES 7.7 trillion in 2023, with KCB Group leading in total assets (KES 1.42 trillion) and Equity Bank following closely (KES 1.21 trillion). By 2024, the banking sector accounted for 31% of the NSE's total market value, with Equity Bank holding 21% of the sector’s market cap. Overall, listed banks have played a key role in Kenya’s economic growth, financial inclusion, and capital market development. We have analysed these factors in this article »»»»»»»»»»
The change in share prices of NSE-listed banks since 2006
Profitability growth of NSE-listed banks since 2006
Today's Poll
Do you think unlisted banks facing a market cap shortfall ahead of the CBK deadline have a chance to ramp their figures up with listing? |
Yesterday's Poll Results
Do you think the financial mismanagement and procurement irregularities in counties will ever be reduced?
🟨⬜️⬜️⬜️⬜️⬜️ Yes (20.69%)
🟩🟩🟩🟩🟩🟩 No (79.31%)
CAPITAL MARKETS
Kenya Launches $900M Eurobond Buyback
Kenya has launched a US$900 million Eurobond buyback for its 2027 bond to better manage its external debt and smooth its repayment schedule. The buyback will be funded through new US dollar-denominated notes, with pricing expected on February 27, 2025, and the offer running until March 3, 2025.
Kenya's debt position
Investors can sell their bonds at US$1,002.50 for every US$1,000 of the principal amount. This move follows Kenya's successful domestic bond buyback and aims to reduce debt risks, especially with US$300 million due in May 2025. The results of the buyback will be announced on March 4, 2025, with settlement expected by March 10, 2025. More on this story in this article »»»»»»»»
PUBLIC FINANCE
Kenya Ups Spending on Key Sectors
Kenya plans to boost its budgets for Health, Education, Security, Agriculture, and Energy/ICT by KSh 405 billion by 2028, aiming for stronger public services despite a tight fiscal environment. The security sector bags a hefty chunk, growing from KSh 257 billion to KSh 391 billion, as the government tackles threats like terrorism and cybercrime head-on. Education sees a steady climb too, hitting KSh 847 billion by 2027/28, while health focuses on Universal Health Coverage and going digital, with 6,000 facilities set to join the national fiber network. Agriculture and urban development aren’t left out, with a boost to KSh 105.7 billion, and the Energy/ICT sector powers up to nearly KSh 600 billion. All this while Kenya trims its fiscal deficit from 4.9% to 4.3% of GDP—because who says you can’t spend big and save smart? 😉
Fred Obura elaborates in this article »»»»»»»
COMPANIES
Kenya Power Vs. Nairobi County
Nairobi City County and Kenya Power are locked in a tit-for-tat over billions in unpaid bills, with the county owing KSh 3 billion for electricity while claiming Kenya Power owes KSh 4.83 billion in wayleave fees. The standoff has turned petty, with water cuts, power disconnections, and garbage dumps outside Kenya Power’s HQ. Meanwhile, counties are drowning in KSh 181.98 billion of pending bills, but Kenya Power still managed to post soaring profits and declare dividends.
Billions Fly to KQ Without Recovery Plan
The Auditor-General's 2023/2024 report criticized Kenya's National Treasury for extending over KSh 55.3 billion to Kenya Airways without a clear loan recovery plan, lacking formal agreements, a repayment framework, or collateral. Kenya Airways reported a KSh 513 million net profit in the first half of 2024, mainly due to reduced finance costs after the government absorbed KSh 83 billion in loans. Efforts to revive the airline continue, including a KSh 19 billion bond swap in October 2024, as part of long-term debt restructuring strategies.
Airtel's Sigh of Relief
Airtel Networks Kenya Ltd. won a KSh 11 million tax dispute against the Kenya Revenue Authority (KRA) after the Tax Appeals Tribunal ruled that KRA failed to follow proper procedures. The dispute arose when KRA contested Airtel's KSh 32.4 million valuation of imported network equipment, demanding an additional KSh 11.3 million in taxes. However, the tribunal found that KRA did not issue a formal decision within the required 30-day period, leading to an automatic approval of Airtel's review request by law.
Beyond Our Borders
Register now to reserve your spot! Visit selar.com/fcnairobi
Here's is what to expect:
● Powerful conversations & keynotes on raising capital, scaling startups in East Africa, and building high-impact careers from speakers like Mia von Koschitzky-Kimani, Nick Josh, Andrew Barden, Charity Mutgi, Dennis Odeng, Peace Itimi and Osaretin Obaro.
● Startup Innovation Challenge where early-stage founders stand a chance to win up to $12,500 in funding
● Evening mixer – wrap up the day with great food, drinks, and high-value networking
▶️ On your watchlist
If you want irresponsible politicians to spend less, you must give them less to spend.
Have a lovely evening