Kenyan Investment Banks

kenya1So, investment banks in Kenya were forced to publish their financial results and you can examine those results by clicking on this link, which will open it up as an excel document. Kenyan Investment Banks (Financial Results Summary)(1).

Now, I have no idea whether these results are accurate or not.  I’ve said before that people have a tendency to look at company financial statements as if they are some kind of Hamurabi code, written in blood and etched in eternal stone.

These statements are written by a bunch of guys sitting in a room and they can put down whatever it is they want and it’s very difficult to verify especially given Kenya’s lax rule of law environment.

Anyway, looking at all those numbers will give me a migraine, but I know there are some readers here who love dealing with numbers and if your one of those people, you should go through the above document and leave a comment here about what you think.

The numbers look low to me (maybe they are trying to avoid the taxman’s noose) but who knows? I think the problems with the whole industry are generally the problems that seem to be plaguing much of the country and that is, there is really no rule of law and when you are dealing with the public’s money, the only answer is to strengthen your securities laws & to prosecute white collar crimes, but how can you do that when the president and his closest advisers are the biggest white collar thieves in the country?

Why Stella Kilonzo and Micah Cheserem haven’t been able to boil this down to a rule of law issue is beyond me.

17 comments for “Kenyan Investment Banks

  1. Albert
    September 13, 2012 at 7:41 am

    The problem we have is not a lack of enforcement ability by the government. Our problem is a lack of strong financial and anti-fraud laws and regulations. If we had them then we would be blaming the office of the DPP. The law of the rich states that “If you can get away with it, then go ahead and do it” and that, is what investment banks in Kenya are doing.

  2. Anonymous
    May 11, 2012 at 1:31 pm

    Lets at least appreciate the positive direction the industry is taking. Change takes time, especially in institutions where regulations are involved, but am glad to say that it is happening.
    If their cook their financials to attached clients or whatever investors they are targeting, KRA are watching and will demand tax equivalent to the percentage of the profits posted.

  3. Imu
    February 3, 2011 at 8:30 am

    So, investment banks in Kenya were forced to publish their financial results and you can examine those results by clicking on this link, which will open it up as an excel document. Kenyan Investment Banks (Financial Results Summary)(1).

    How come I don’t see zimele here? is it not an investment bank?

  4. Anonymous
    June 12, 2010 at 4:57 am


  5. Beany
    April 28, 2010 at 2:36 pm

    To everyone and no one in particular: please learn to differentiate “this” from “these.”

  6. Grid
    January 29, 2010 at 6:39 am

    I see a problem that plagues Africa today where leaders are applauded for doing the bare minimum and we heap praise on the so called minimum reforms as opposed to maximum reforms. I think that it is not enough to tell IBs to publish results without going ahead to ensure that what they publish is actually authentic and also punishing non-compliance severely as a deterrent. What is lacking is actually legislation to guide practice in investment banking and also rein in deviants. Much as we have a culture of impunity in this country (just take a walk in town and watch how motorists(matatus and personal cars) flout traffic rules at will)i believe all is not lost and that taking cue from the financial crisis in the West, pre-emptive reforms need to be instituted to safeguard public interest. Because it is only a matter of time before our financial players start offering the complex financial products that characterised the meltdown in the West and especially America.

  7. Busybee
    October 8, 2009 at 9:36 am

    So, investment banks in Kenya were forced to publish their financial results and you can examine those results by clicking on this link, which will open it up as an excel document. Kenyan Investment Banks (Financial Results Summary)(1).

    Did I just read this
    ”In actual fact the govt deserves praise for instituting this changes and introducing transparency in the investment and capital markets sector.” You must be joking

  8. Jashonabidii
    October 7, 2009 at 8:15 am

    kenyanentrepreneur, I concur… Jellyfish is talking “naivette”. The loopholes are so plain.It’s nothing to make public “audits” or even to pay tax, if you plan to cheat in the first place.Kenya needs watertight ways of proofing details -going electronic.Just can’t trust people to be honest when they can be not.But systems can tell.

  9. kenyanentrepreneur
    September 5, 2009 at 8:47 pm

    At this point, I’m at a loss for words in terms of trying to respond to some of your ruminations.

    Anyway, I just heard from this Kenyan lawyer whose friends happen to run quite a number of companies in Kenya and she told me that those friends basically told her that when it comes to taking bribes, Raila is a pro and he doesn’t even do it in a nice way — it is pay up or else…

    The money (she said) is shifted through emissaries. He never touches it himself. These are company executives telling her that they’re paying him because they’re are afraid of being singled out in public if they don’t.

    So, don’t tell me about the rule of law in that place.

  10. Jellyfish
    September 4, 2009 at 11:23 pm


    I agree with Kachwanya & Bankelele that the first step of disclosure is indeed a good start in introducing transparency and restoring trust in the investments sector. Many of the figures are in the negative but that reflects the downturn being experienced in the entire global and local financial sector.

    In contrast to you I think numbers are extremely important in measuring a company’s performance. Since time in memorial accounts have been used as the benchmark for measuring a company’s performance. Afterall what other way is there to measure the financial worth of a company if not numbers? You simply can’t go out there and release a statement saying the company did well and conforms to the law and then walk away without releasing some figures.

    I also disagree with this notion that there is no rule of law in Kenya. How come companies pay tax? If there was no rule of law the companies wouldn’t bother releasing results. The fact that they were forced to release their results which many of them were reluctant to do is testament that some semblance of law exists and compliance with the law does indeed occur. Actually unlike Nigeria & even the USA the Kenyan financial sector has proved resilient and well managed to date. We have not witnessed the collapse of a bank in recent times.

    Sure we did experience some problems with some Stock Brokerage firms which is the reason the govt has introduced this measures to regulate the capital markets. Initially the capital markets industry was self regulated a practice that was commonplace in the developed markets. As with the developed markets the lack of regulation proved to be too tempting to some hence the stepping in of authorities. In actual fact the govt deserves praise for instituting this changes and introducing transparency in the investment and capital markets sector.

  11. kenyanentrepreneur
    September 3, 2009 at 7:40 pm

    That’s an interesting point about pension funds because I’m not sure if the NSSF invests some of their money through these banks or not.

    However, you are right: without criminal prosecution, very little will change. I think in the west, the threat of criminal prosecution has kept far more people in line. Yes, you’ll always have your Madoff’s, because nothing is 100% full proof, but I think that just the threat of going to jail or of losing one’s license, keeps many people in check.

    I need to look at Equity banks numbers because I’m hearing too many stories about that bank and all it’s shady business.

    Maybe you can elaborate and tell us what exactly doesn’t add up.

  12. key-nyan
    September 3, 2009 at 4:31 pm

    We’ve seen it in the current crisis that it is very hard, even in the developed markets, to keep tabs on what the different investment vehicles are doing.

    Looking through the data, there are some things that stand out as odd. Example, some of the firms have a high increase in year on year employee comp, and yet as brokerage houses, have massive loses in their primary revenue source… plausible but odd at the very least.

    In my opinion, we will have greater vigilance if we have a better informed public. So, if the money is coming from pension funds, have properly educated people at the helms of these funds and have the IBs accountable to them.

    Improper reporting and disclosures should be made into criminally prosecutable offences. Haven’t read up much on Kenyan corporate law, but if we had/have a framework for punishing crimes, then it would make it easier to legislate.

    Maybe taking a cue from the UK FSA on a principles based regulation might be a start… (that’s if its not in place already)

  13. kenyanentrepreneur
    September 3, 2009 at 10:20 am

    Bankelele & Kachwanya:
    I think both of you are missing the key issue here and I’m not quite sure why that is.

    Whenever you have a situation where entities are taking money from the public, somebody has to ensure that the public’s money will be protected.

    The only body that can provide this assurance is an independent government agency. Why? First, it’s the governments job (in a democracy) to protect it’s citizens from fraud, but secondly, the government is the only body within the country that has the power to prosecute (when or if, fraud takes place).

    The CMA is not a prosecutorial body and forcing banks to publish results, without penalties applied for perjury is a joke. So what if I fake my results? Who is going to prosecute me for lying? Guess what? nobody. And as long as I know that I can get away with it, I will lie.

    So, the answer is not to hire for-profit auditing companies like KPMG or pricewaterhouse. Who do you think is paying these companies? it’s those same firms! and it’s not in their interest to bring down a firm who is paying them.

    The head of the CMA should actually be a lawyer who has extensive experience with securities laws so that they can sit down and write a whole new body of laws, which will lay out strict guidelines, followed by strict prosecution for those who defraud the public.

    And until the public has this assurance, i.e. that their money will be protected, they are not going to flock back to the NSE.

    I’ve been saying here for a while that you cannot have a thriving capital markets in a country that does not respect the rule of law.

    I don’t know why Kenyans keep under-playing the links between the rule of law and economic development. The people who lost money with Nyagah got nothing & to date, no one has even been prosecuted and Stella Kilonzo thinks that people will go back after that?

    Who is protecting the public here?

  14. kachwanya
    September 3, 2009 at 3:42 am

    It is good that they are now disclosing their financial statements whether fake or not. It gives the public an idea of who is near their death bed. I guess at year end as @Bankelele said there will be clear indications after they release their audited accounts. So far so good for the public

  15. bankelele
    September 3, 2009 at 1:40 am

    These are un-audited numbers given out by companies not used to the process of disclosure. At year end, they will have audited accounts – the audit/accounts fratenity is an effective rigid group in kenya, who are strict about IFRS, which the i-banks will have to comply with. Kenya does not have the exotic products that US i-banks have and if the momentum of disclosure is maintained, it will be healthy for all.

  16. kenyantykoon
    September 3, 2009 at 1:34 am

    it seems that most of their income and consequently profits and income have been going down(negative changes) No wonder they wanted to keep that stuff to themselves. Maybe they are just experiencing a rough patch. do you think that this figures are doctored? Personally i think they are not 100% accurate because no one likes their dirty lined out in the street(personal speculation-i must not be quoted)

  17. kainvestor
    September 3, 2009 at 12:54 am

    i’m one of those guy who luv the numbers :-)and this ones don’t add up to me. something is not right, starting with lack of enough disclosure. I would really like to know who audits their books, coz they seems incompetent to even be let near any incomplete financial statements.

    In some way you managed to rope in Kibz.

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