Things seem to be going well for equity. The malicious rumors that were circulating seems to have ebbed. They have declared a huge profit, and have been cleared by the parliamentary committe. Last weeks their share values returned a significant gain.

What does this show us?

The eyes of the frogs will not stop cows from drinking water.

Multinationals will stop at nothing to kill local competition

Local investment can be boosted if people just ignore the prophets of doom.

Our politicians are ******s and will mortgage our country to the devil if that will score them some political points. [Shame on Khalwale]

http://www.nationmedia.com/dailynation/nmgcontententry...._id=56&newsid=108910

quote:

House almost cost Equity its customers

Story by OWINO OPONDO
Publication Date: 10/21/2007
The banking sector in Kenya has for long operated as a perfect study in oligopoly. For that, the few institutions available lived true to the historical purpose for which they were established – serving the interests of the elite.

I was once stranded in Meru town because an ATM of a big bank captured my card. My pleas to the branch boss to retrieve it for me so I could proceed with my planned official journey from Isiolo to Nairobi fell on deaf ears.

The smartly dressed manager, walking with a swagger, refused to assist, and insisted I had to report the matter to the head office in Nairobi. A friend advanced me a loan and my first purpose on arrival in Nairobi was to order my account closed. I moved on, and swore never to return to that bank.

For a long time, access to banking was the preserve of the rich. Indeed, multinational and big local banks demanded huge sums of money from potential customers to open and retain accounts. And failing to understand that most Kenyans lived in poverty, most of them closed down their branches in rural areas.

That, technically, raised banking services above the reach of low income earners who resorted to keeping their money under the pillow.

Similar discriminatory rules were applied to loan applications, and those seeking credit were required to put on the table vital documents such as title deeds as collateral. This made access to bank loans a preserve of the super rich and the propertied in society. The auctioneer’s hammer hung over the heads of defaulters.

Since it got the nod to transform itself from a micro-finance outfit to a commercial bank in 2004, Equity Bank has opened branches throughout the country, including rural areas that had been shunned by the big banks.

It has also demystified banking and reduced the cost of, and access to personal credit, to the chagrin of arrogant players in the sector.

However, Equity’s expansion earned it enemies within the banking sector, with allegations of malpractices bandied around by known and unknown sources.

In Parliament, East African Cooperation assistant minister Dr Bonny Khalwale dropped a bombshell on July 10 by tabling a letter by one S K Patel alleging serious malpractices and questionable shareholding in Equity Bank.

The move was sure to create panic within the institution and could have led to its atrophy were Kenyans not patriotic about their banking needs.

It is for this reason that I commend Parliament’s departmental committee for Finance, Planning and Trade for investigating the claims in the unsigned letter and others by some MPs.

Chaired by Bondo MP Dr Oburu Oginga, the committee gathered evidence from Equity chairman Mr Peter Munga and the institution’s chief executive Mr James Mwangi.

Others interviewed by the committee were Central Bank of Kenya governor Prof Njuguna Ndung’u and a former Equity Bank director, Ms Wanjiku Mugane.

Dr Oginga tabled his team’s report in Parliament on Wednesday in which Equity was handed a clean bill of health.

Then the tone of MPs turned patriotic on Thursday when they praised Equity for making banking services available to low-income earners who had been shunned by bigger local and multinational competitors.

In their evidence, both Mr Munga and Mr Mwangi reminded the Oburu team of the awards Equity had bagged due to its performance. And that with a market capitalisation of over Sh27 billion, Equity was the fourth biggest bank in Kenya and the eight among companies trading at the Nairobi Stock Exchange.

They informed the committee that Mr Mwangi’s shareholding of 7.3 per cent against the approved 5 per cent was known by the Capital Markets Authority (CMA) with which it had a social contract not to dispose of the shares until July 2008. Central Bank of Kenya governor, Prof Njuguna Ndung’u later confirmed to the committee the existence of the Equity-CMA agreement over Mr Mwangi’s shares.

Ms Mugane told the committee she had written a letter to the Equity board on levels of ownership by various staff members in good faith.

The committee report says Ms Mugane sold her shares in Equity before resigning as a director, and that she has since sold substantial shares of her firm, First Africa Capital, to the Standard Chartered Bank.

After clearing Equity of the allegations of malpractice, the House team gave its parting shot: “From the foregoing, the committee is persuaded that Equity Bank is a strong financial institution that has embarked on expansion targeting the lower market by offering very competitive packages. This trend should be encouraged for the good of the common Kenyan.”

There are lessons MPs should learn from the Equity matter. One, that banking is a confidence business. Indeed, the greatest asset of a bank is not the money in its vaults is public confidence.

This is quality that once lost, for wrong or right reasons, even the biggest bank will come tumbling down like a house of cards.

Of all things MPs do, let them not play politics with the banking sector because it is very sensitive to public perceptions. There are existing institutions to prefect the sector, including CBK and the CMA to which MPs should take claims of impropriety at Equity.

It is intriguing that the committee, in its report, did not suggest that action should be taken against Dr Khalwale who tabled the letter allegedly written by a faceless S K Patel whom the committee could not trace!

This is impunity at its most eloquent, and future parliaments must find ways of punishing members who make reckless claims that risk the general welfare of the public.

Kudos to those brave sons of Kenya.

I knew from the word go Equity was running on fundamentals, what with all those awards that are going their way! Of course the multinationals willl not smile at such success cos their main aim is to squeeze the last blood out of the common man. Too bad their machinations have been nicked in the bud!

quote:

Originally posted by sajini:
Things seem to be going well for equity. The malicious rumors that were circulating seems to have ebbed. They have declared a huge profit, and have been cleared by the parliamentary committe. Last weeks their share values returned a significant gain.

What does this show us?

The eyes of the frogs will not stop cows from drinking water.

Multinationals will stop at nothing to kill local competition

Local investment can be boosted if people just ignore the prophets of doom.

.

You are spot on brother! Sounds pretty much like what i have always reasoned. And i believe many more will show resilence in the face of malice and witch hunting. I have in mind transcentury group and all their investments. I have in mind ICDC, Family Bank,.and all other upcoming IPOS, particularly indeginous ones.

I am a witness that James Mwangi (despite his association with Goldenberg) is a very astute and shrewd strategist. Way back in 2001, he were hired by him, 25 of us, fresh from college and went through a rigouros 1-month training. We were the 2nd lot, many more were to follow. It was then that he shared the dream he had with us. How many banks then (even multinationals) would afford the luxury of such investments and training personnel). Most were downsizing. I personally thought that he was out of his mind. With a single branch in Nairobi (a micro-finance) and all branches located in Central, non networked (of course no ATMs), the man had a vision of taking on Africa within a decade. I used to laugh him off...

When BBK was busy closing branches, he was on an expansion spree.

Although I later fell out with him, I still respect him as a very visionary man, our very own small Jack Welch in the making probably. I saw the day he pulled Helios through shaking even the money markets. The bank is now the biggest in E&C Africa in terms of capitalisation and probably deposit base.

Isn't it time we had faith in ourselves?

quote:

Originally posted by Mjuaji:
I am a witness that James Mwangi (despite his association with Goldenberg) is a very astute and shrewd strategist. Way back in 2001, he were hired by him, 25 of us, fresh from college and went through a rigouros 1-month training. We were the 2nd lot, many more were to follow. It was then that he shared the dream he had with us. How many banks then (even multinationals) would afford the luxury of such investments and training personnel). Most were downsizing. I personally thought that he was out of his mind. With a single branch in Nairobi (a micro-finance) and all branches located in Central, non networked (of course no ATMs), the man had a vision of taking on Africa within a decade. I used to laugh him off...

When BBK was busy closing branches, he was on an expansion spree.

Although I later fell out with him, I still respect him as a very visionary man, our very own small Jack Welch in the making probably. I saw the day he pulled Helios through shaking even the money markets. The bank is now the biggest in E&C Africa in terms of capitalisation and probably deposit base.

Isn't it time we had faith in ourselves?

From Daily Nation: 17/12/2007:
"Equity Bank chief executive Mr James Mwangi was awarded a honorary Doctor of Humane Letters degree for his “outstanding achievements in transforming the lives of thousands of ordinary people in Kenya and beyond”.

Prof Mugenda noted that in addition to Mr Mwangi’s innovative leadership in the financial sector, Equity Bank was actively involved in the promotion of education and arts.

The bank has a sponsorship programme for the best performers in the Kenya Certificates of Secondary Education in every district that it operates.

It also introduced a pre-university internship programme for the best two students from every district where the bank operates.

Equity also sponsors major artistic events such as the schools and colleges national drama and music festivals."

ngunjiri,

yap i believe he deserves it. he is our home grown Jack Welch.

quote:

Originally posted by Mjuaji:
ngunjiri,

yap i believe he deserves it. he is our home grown Jack Welch.

Mjuaji,
And I totally agree with you.

......i dont think Kimunya's move on granting Equity Bank exemption from disclosing the real owners till 2016 is ethical.It also creates some kind of suspicion suspicion in the market.
These kind of favours may cost us dearly in the future.Why does the minister want to keep the shareholding profile of Equity Bank a secret till 2016?....

and this one for a company that spent 11B shillings to invest in another company.....wangui k is this telephone number in existence? http://www.heliosinvestment.com/

This message has been edited. Last edited by: kariúki wa kíhia,

...phew i have googled some few 'searches' and i have found out that if you stumbled into Helios in the streets, you would definately smell Transcentury ltd in them
these guys sure are Corporate giants. i admire them.

http://www.transcentury.co.ke/transcentury/portfolio.asp

Wakihia,

I must admit i was in the dark in this one.A lot more respect for this jamaas.These are the people who Kenya truly need for their foresight.