Yesterday The Economist wrote that “Across Africa, banks are expanding. Their returns aren’t”. I don’t have data on returns for 2012, but when it comes to profits, Kenyan banks did incredibly well last year. Check this out:

  1. Kenya Commercial Bank, the largest in East Africa, grew profits by 14% in 2012. Total profits: 17.2 billion shillings ($199 million)
  2. Cooperative Bank, another huge player, rose pretax profit rose by 57% (!!!) to 9.97 billion shillings ($115.53 million). The year before profits were around 6 billion shillings
  3. Equity Bank, which targets the lower income population and has the largest number of customers in Kenya, grew profits by 36% to 17.42 billion shillings ($201.85 million)
  4. CFC Stanbic, Kenya’s 6th largest bank, posted a 64% rise in its pretax profit to 4.59 billion shillings ($53.36 million)
  5. NIC Bank, a medium-sized institution, increased by 25% to 4.5 billion shillings ($51.3 million)
  6. The only negative results I’ve seen was for Kenya’s Housing Finance, which posted a 7% drop in its pretax profit to 907.6 million shillings ($10.36 million)

In case you want more data, here are some more details about the 10 most profitable Kenyan banks in 2011

Return on Assets Return on Equity
Profit before tax Net Assets Return on Assets Shareholders equity Return on equity
1 Kenya Commercial Bank 14,081.87 282,494 4.98% 45,163 31.18%
2 Equity Bank 12,103.51 176,911 6.84% 35,047 34.53%
3 Barclays 12,012.56 167,305 7.18% 29,223 41.11%
4 Standard Chartered Bank 8,250.84 164,182 5.03% 20,571 40.11%
5 Co-operative Bank 6167.77 167,772 3.68% 20,972 29.41%
6 Citibank. 4,801.89 74,646 6.43% 15,112 31.77%
7 I&M Bank 4,457.33 76,903 5.80% 13,856 32.17%
8 NIC Bank 3,360.60 73,581 4.57% 9,900 33.95%
9 Diamond Trust Bank 3,248.47 77,453 4.19% 10,366 31.34%
10 CFC Stanbic Bank 3,128.37 140,087 2.23% 10,150 30.82%

Returns were not so bad after all (source, pdf).  How about the non-financial sector (i.e. the “real” economy)?

Of course I don’t have figures for every publicly listed company in Kenya, so this is not representative of the whole economy. But since I’m on a roll, let me put more links I came across this week.

Next week I’ll write some thoughts on the profitability of the banking sector. I’ll try to address questions like “Why are banks so profitable?” And “at whose expense?” But in the meantime, let’s just hope for a peaceful election.

Advertisements