Barclays Bank of Kenya Starts Trading at NSE as Absa
Barclays Bank Kenya Limited, is today officially trading on the Nairobi Securities Exchange (NSE) as Absa Bank Kenya Limited Plc and has in the process changed its trading ticker, from BBK to Absa.
The listing comes almost a month after Absa Bank Kenya finished rebranding from its iconic light blue colour that it had on for the last 104 years, to light red.
Since 2017, Barclays Bank has sold its controlling stake to Absa, a South African based though it also has offices in other countries such as Namibia and Nigeria.
According to the Daily Nation, the rebrand from BBK to Absa Kenya, which took place between January to December 2019, has cost Barclays Bank Kenya Kshs 910 million.
BBK had a profit before tax of Kshs 6. 2 billion by September 2019, according to the Business Daily newspaper.
Its Chief Executive Officer (CEO) is Mr Jeremy Awori and the bank is considered to be a Tier 1 commercial bank, thvat is, based on its weighted index of all its net assets, capital and deposit accounts, and is considered by the Central Bank of Kenya (CBK) to hold a 50 percent of the banking sector’s market share.
While in its home country of South Africa, Absa reported earnings and dividends of three percent as of July 2019 and is adjusting to the concept of financial technology, states Africa Report.
It has also found a welcoming presence in the Kenyan banking sector which has 44 banking institutions, through its acquisition of Barclays Bank Kenya.
Speaking during the launch held at the Nairobi Securities Exchange (NSE), the Chairman of Absa Kenya, Mr James Ndegwa, says that the change will set the trend for other companies to also get listed on the capital market.
“We are changing from being a bank to a holistic financial institution. As Absa Kenya, our goal is to connect the dreams and aspirations of the Kenyan people with financial resources to achieve them,” says Mr Ndegwa.
Though BBK official changed its name to Absa Kenya on February 10th 2020, it has been operating in the country for the last 104 years.
Two days ago, for instance, The Standard, reported how hackers had stolen Kshs 11 million from Automated Teller Machines (ATM’s) belonging to Absa Bank Kenya.
Furthermore, according to the dozen commercial banks that are trading on the NSE, BBK is among those that have been able to withstand the “shock” that came with the introduction of the interest rate capping found in the Banking Act of 2016, which by reducing rates at four points above the then Central Bank Rate (CBR) of ten percent.
The aim of the law was to ensure that Small and Medium Enterprises (SME’s) would be able access credit from large banks, which has been a difficult endeavour.
In this sense, Kenya was following in the footsteps of other countries such as Chad and Equatorial Guinea, a few Central African countries that established rates of 24 percent for Micro and Financial Institutions (MFI’s), operating in their countries, states the Consultative Group to Assist the Poor (Cgap).
The rate cap law had the opposite effect.
Global financial institutions such as the International Monetary Fund (IMF) urged for the repeal of the law. This prayer was answered, when the Finance Act of 2019 repealed the rate cap law, found in Article 33 (b) of the Banking Act.
During the launch, Chairman of Absa Bank Kenya, Mr Charles Muchene, says that BBK, now Absa Bank, states the name change is one of the factors that has marked its foray into the Kenyan banking industry for the last 104 years
“We have been a bank of many firsts ever since we set foot in Kenya in 1926. As we take on our new identity, our customers should expect this innovative spirit to carry on into the future,” says Mr Charles Muchene, the Chairman of Absa Bank Kenya.
In a statement from the CBK dated February 18th, 2020, the regulator challenges Absa Bank Kenya to remain steadfast in adhering to the Banking Sector Charter, which was introduced last year, by ensuring that commercial banks will be more customer centric, have risk based credit pricing and strive to be more transparent.
“It is critical that Absa Bank Kenya rises to these challenges with a sense of responsibility that encompasses 104 years of its heritage. Only be being more customer centric, fair and ethical will ABSA be able to breathe more life into its transformation,” notes the statement.
According to Africa Report, besides Kenya, Namibia, Nigeria and South Africa, Absa also a presence in other countries such as Botswana, Mozambique, Zambia, Uganda and Tanzania.
The Eagle, a media house that is based in Uganda, has named the rebrand of Barclays Bank of Kenya into Absa Bank Kenya, currently ongoing in other seven African countries, which started in 2018 with its South African headquarters and is due to end in the middle of this year, as “ one of the largest rebranding exercise in Africa.”
Despite the difficult process that it has taken, the CEO of Absa Bank Group, Mr Daniel Mminele, has conveyed his gratitude to the regulatory authorities in the banking sector in Kenya who have give approval of Absa acquisition of BBK.
“ I want to thank the Kenyan regulatory authorities for the steadty, giuding hand through what is actually a very complicated process. Today it the culmination of that dream but also the beginning of a great journey that we will walk together,” he says.
In 2015, the Kenyan banking regulator, CBK, reeling from the high costs of liabilities when the country’s banks were sold during the era of the late President Daniel Moi, such as Dubai Bank and Imperial Bank, had a placed a moratorium when it comes to the licensing of new banks in Kenya.
The moratorium has made the process of acquiring such a license difficult, even for foreigners, as the example of Access Bank of Nigeria has been, when it completed the 100 percent acquisition of Transnational Bank Plc, following approvals from regulators such as the Competition Authority of Kenya and CBK.
The Access Nigeria-Transnational Bank Plc acquisition has made it possible for the Nigerian based bank, with an asset base of $ 1.6 trillion, to have its hands on 28 branches of the Kenyan bank and presence in the United Kingdom and African countries such as the Democratic Republic of Kenya (DRC).
Transnational Bank Plc has been associated with the cronies of the late President Moi.