Equity Group has been ranked as the second-strongest banking brand globally. With a brand strength index of 92.5 out of 100, it has moved up two places from its 2023 ranking.

KCB Group, making its top 10 debut in the 2024 ranking, was ranked 5th with a brand strength index of 91.5. This represents a 1.1 points improvement over last year’s score of 90.4.

Both banks also received the AAA+ elite brand strength rating, a clear indication of their strong brand presence. Equity and KCB were among four banks from Africa that made it to the top 10 positions in this year’s rankings.

Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test. It publishes nearly 100 reports, ranking brands across all sectors and countries.

Equity was also ranked 10th among Africa’s most valuable banking brands, with a brand value of USD 450 million. This represents a rise of USD 22 million from last year’s brand value of USD 428 million.

Brand Finance defines brand value as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. This is, however, different from the valuation of a company’s assets.

The world’s top 500 most valuable and strongest banking brands are included in the annual Brand Finance Banking 500 ranking.

On the global front, Indonesia’s BCA Bank was ranked as the world’s strongest banking brand with a score of 93.8, climbing by 0.9 points from last year’s ranking.

China’s ICBC was the most valuable banking brand with a brand value of USD 71,828 million. In Africa, South Africa’s Standard Bank Group was the most valuable banking brand with a brand value of USD 1,966 million.

Overall, the world’s top banking brands have registered a third year of growth. This is a testament to their ability to maintain customer trust in a highly competitive environment.

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Key Highlights:

• Profit After Tax: Stanbic Holdings Plc reported an impressive net profit of KES 12.2 billion. This substantial growth reflects the bank’s ability to navigate a tough operating environment marked by currency fluctuations, inflationary pressures, and geopolitical tensions.
• Dividend Payout:  Shareholders will be pleased to know that Stanbic Holdings Plc is distributing dividends equivalent to 50% of its earnings. This commitment to rewarding investors underscores the bank’s financial strength and long-term vision.

Factors Driving Growth

• Improved Net Interest Margins: The bank’s net interest income surged by 35% to KES 25.6 billion. This growth was driven by a healthy balance sheet expansion and increased margins on interest-earning assets.
  Strong Trading Revenue: Stanbic’s trading revenue played a significant role in its overall performance. The bank’s ability to capitalize on market opportunities contributed to its robust financial results.
• Focus on SMEs: Stanbic remains committed to supporting small and medium-sized enterprises (SMEs). By aligning with economic growth vectors, the bank aims to drive Kenya and South Sudan’s prosperity.
• CEO’s Perspective: Dr. Joshua Oigara, Chief Executive of Stanbic Bank Kenya and South Sudan, emphasized the bank’s resilience. Despite external challenges, the diligent execution of their strategic plan has yielded positive outcomes. Dr. Oigara expressed confidence in the bank’s new three-year strategy, which builds on the momentum from previous fiscal periods.

“Despite facing a challenging business environment marked by heightened currency and inflationary pressure, rising interest rates and geopolitical tensions, the Group delivered strong financial results. This demonstrates resilience in our business model underpinned by diligent execution of our strategy. We remain committed to our purpose of driving Kenya and South Sudan’s growth, more so as we transition to our new 3-year strategy.”

Dr. Oigara.

• Customer Franchise Growth: Customer deposits increased by 18% to KES 321 billion, demonstrating the bank’s strong customer base and trust.Loans and advances rose by 10% to KES 261 billion, reinforcing Stanbic’s commitment to supporting businesses and individuals.
• Non-Interest Income Boosted by Foreign Exchange Revenue: The bank’s non-interest income received a significant boost from foreign exchange activities. Increased volumes and better forex performance contributed to this positive trend.

Stanbic Holdings Plc’s financial results are a testament to its strategic focus, resilience, and dedication to driving growth. As the bank embarks on its new three-year strategy, investors and customers can look forward to continued success.

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Macro Review – February 2024

Kenya surprised the financial markets by partially buying back its scheduled 2024 Eurobond and simultaneously issuing a new $1.5Bn amortized Eurobond. The new 2031 Eurobond was sold at a discount of 97.270%, resulting in an effective yield of 10.375%.

The Kenya shilling strengthened by 10.7% against the US Dollar in February 2024, largely due to the successful early refinancing of the scheduled June 2024 Eurobond. This, coupled with high domestic real yields, led to a significant upswing in the Kenyan shilling.

Inflation rates softened to 6.3% in February 2024, primarily driven by a deceleration in food and fuel inflation rates. However, core inflation persisted at 3.6%, indicating ongoing price pressures in the real sector.

Equities Market Highlights

The market indices recorded an upward trend, pointing to a better outlook across the equities segment. Foreigners’ participation rate eased marginally to 60.0% of total market activity, but their trading turnovers significantly increased by 63.7%.

E.A Cables emerged as the highest capital gainer in February 2024, followed by Kenya Power and EA Portland Cement. On the other hand, Standard Group topped the list of capital losers, followed by Home Afrika and BK Group.

Stock Recommendations

AIB-AXYS Africa recommends buying shares of Co-operative Bank, Equity Group Holdings, Stanbic Kenya, NCBA Group, and Standard Chartered Bank. These stocks have shown strong return-on-equity, operational efficiency, and top-tier asset quality.

For investors looking to hold, ABSA Bank Kenya, Diamond Trust Bank (DTB-K), KCB Group, and Bamburi Cement are recommended. These stocks have demonstrated robust growth and resilience despite the challenging market conditions.

 Upcoming Earnings Season

Investors should anticipate the release of full-year 2023 results for the Banking and select Insurance sector counters, alongside Bamburi Cement. Mixed results are expected, marked by a flurry of dividend payments across various counters.

Investing wisely requires keeping a close eye on market trends and expert recommendations. As we move into March 2024, consider these insights from AIB-AXYS Africa to make informed investment decisions.

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Revised Offer

Canal+, already the largest shareholder in MultiChoice, has increased its bid to 125 rand per share. This revised valuation places the pending shares at approximately 33.7 billion rand (equivalent to $1.77 billion based on Reuters calculations). Notably, this new offer comes after MultiChoice rejected Canal+’s initial bid of 105 rand last month.

In response to its 35.01% shareholding in MultiChoice, Canal+ faces a mandatory offer requirement as stipulated by the Takeover Regulations Panel. Consequently, the company has committed to submitting a firm offer no later than April 8.

MultiChoice’s Perspective

MultiChoice, as Africa’s premier pay-TV provider, expressed reservations about the initial offer, deeming it significantly undervalued. However, both companies have now pledged to collaborate closely during this acquisition process. As part of this commitment, MultiChoice will provide customary exclusivity undertakings to Canal+.

Upon the formal submission of the mandatory offer, the Independent Board of MultiChoice will convene. Following an assessment by independent experts, the board will offer its opinion and recommendation regarding the acquisition.

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What Does This Mean for You?

1. Instant Withdrawals: Equity Bank now allows PayPal account holders to withdraw funds instantly. Whether you receive payments in Kenyan Shillings (KES) or US Dollars (USD), you can transfer the money directly from your registered PayPal account to your Equity Bank account.
2. No Daily Limits: Unlike before, there are no daily withdrawal limits. Whether you’re a freelancer, an e-commerce business owner, or an individual, you can access your funds whenever you need them.
3. Convenient Access: You can use the Equity Mobile App or Equity Online to seamlessly link your PayPal account to your bank account. Once connected, the updated PayPal button will appear on your dashboard, displaying your account balance.

Gerald Warui, Equity Bank Kenya’s Managing Director, shared his thoughts on this development: “The reduced settlement period will support businesses and individuals in managing their cash flows more effectively. Our enhanced withdrawal capacity is a major boost for local PayPal users and aligns with the rapid growth of cross-border trade.”

PayPal’s Perspective

Mark Mwongela, Director for the Middle East & Africa at PayPal, emphasized the significance of this collaboration: “Kenya’s thriving digital economy presents vast opportunities. Our partnership with Equity Bank ensures seamless and real-time access to PayPal funds for millions of Kenyans. Together, we’re committed to supporting local digital growth and facilitating cross-border payments.”

Equity Bank’s instant PayPal withdrawal service is definitely a game-changer for Kenyan users. Whether you’re a business owner, freelancer, or individual, managing your finances just got easier.

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In this transaction, Standard Bank Group served as the joint lead manager and bookrunner for the Republic of Kenya’s new Eurobond.

Additionally, it acted as the joint dealer manager for the concurrent tender offer of $1.4 billion in outstanding Eurobonds, also set to mature in June 2024.

The Eurobond, which concluded on February 16th, was issued at a yield of 10.375% with a 9.75% coupon. It is slated to mature in 2031, with a six-year weighted average life. The principal will be amortized in equal installments during the final three years leading up to maturity.

The proceeds from the Eurobond were allocated to fund the tender offer for the 2024 Notes, which was settled on February 21st, 2024.

The Eurobond witnessed strong demand from investors, keen to back Kenya’s proactive debt management strategies.

This robust interest enabled the country to tighten pricing and increase the issuance size, compared to initial guidance. The tender offer saw remarkable success, with over 72% investor participation, leaving just over $550m in outstanding bonds.

Joshua Oigara, Chief Executive of Stanbic Bank in Kenya and South Sudan, expressed his pride in the bank’s role in facilitating the Eurobond for Kenya. He noted that the significant demand for the bond reflects growing investor confidence in Kenya.

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Equity customers have, since the introduction of Equity Mobile in 2022, been accessing mobile banking services on both the EazzyBanking app and the new Equity Mobile app. The lender now says that it will completely retire the former.

In a communication dispatched to its customers, Equity Bank revealed that the EazzyBanking app will cease to be operational on March 15, 2024. The bank is encouraging its customers who are currently using the soon-to-be-discontinued app to transition to their newly introduced Equity Mobile app.

A quick search on Google’s Play Store for “Eazzy Banking App” no longer brings results for the former app, and only shows the new Equity Mobile app, indicating that it has already been removed.

Customers still using the old app now have until the indicated date to install the new app or be locked out of digital banking services.

The new Equity Mobile is designed with an emphasis on providing a contemporary and user-friendly experience. It boasts advanced features, including integration with international remittance platforms such as PayPal and Western Union.

Furthermore, the Equity Mobile App offers a wide array of functionalities. Customers can schedule payments, view account balances, save, and transfer funds to other Equity Bank accounts both regionally and internationally. This feature aids in facilitating regional and international trade.

Additionally, users can send money to mobile wallets, check Boostika and EazzyLoan limits, borrow, save, and make payments to the One Equity Till Number, among other operations.

The Equity Mobile App is compatible with both Android and iOS platforms, making it accessible to a broad range of smartphone users.

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The Signature Card targets individuals earning between Kshs. 300,000 and Kshs. 1 million per month, while the Infinite Card is for those earning over Kshs. 1 million monthly. Both cards are available strictly by invitation.

These premium cards offer a wealth of benefits including exclusive travel and lifestyle experiences, wellness features, top-tier rewards, and dedicated relationship managers.

Jane Isiaho, KCB Bank Kenya Retail Director, expressed confidence that these offerings will further enhance the bank’s premium services, catering to the sophisticated needs of their discerning clientele.

Cardholders can look forward to accelerated reward rates, round-the-clock concierge service for travel arrangements and personalized recommendations, access to airport lounges, preferential treatment at partner hotels and resorts worldwide, entry to prestigious golf clubs and tournaments globally, and the ability to transact in both Kenyan Shillings (KES) and United States Dollars (USD).

Eva Ngigi-Sarwari, Visa Kenya Country Manager, expressed excitement about extending their partnership with KCB Bank through the launch of these premium cards.

She emphasized that the cards aim to provide KCB customers with exceptional spending power, enhanced protection, and superior rewards.

This collaboration signifies a major achievement for KCB Bank, demonstrating its dedication to creating world-class services for its high net-worth customers.

According to a recent market research report, the volume of Kenya’s cards and payments market was $49.5 million at the end of 2022, with an expected Compound Annual Growth Rate (CAGR) of over 17% from 2022-2026.

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The decision came after MultiChoice’s board deemed the offer to significantly undervalue the company. This development marks a pivotal moment in the ongoing dynamics of the media industry in sub-Saharan Africa.

Canal Plus, already holding a substantial 31.7% stake in MultiChoice, unveiled a non-binding indicative offer on February 1st, valuing each ordinary share at ZAR105 ($5.62).

Despite its existing position as the largest shareholder, the French pay-TV operator sought to acquire the remaining ordinary shares, pending regulatory approval.

Canal Plus initially entered the scene in early 2020, acquiring a stake in MultiChoice. Over the subsequent years, the French broadcaster strategically increased its shareholding, culminating in the recent attempt at a full takeover. The move was part of Canal Plus’ broader strategy to expand its influence in the African media landscape.

MultiChoice’s decision to reject the takeover bid was rooted in the belief that Canal Plus’ offer failed to accurately reflect the true value of the company.

The board expressed concerns over the undervaluation and concluded that continuing talks with the French broadcaster would not be in the best interest of MultiChoice and its stakeholders.

The rejection sets the stage for potential shifts in the competitive landscape of the sub-Saharan African media market. MultiChoice, with its stronghold as the main sports broadcaster in the region, remains committed to charting its own course.

Meanwhile, Canal Plus may need to reconsider its approach and explore alternative strategies to solidify its presence in the African market.

MultiChoice’s firm stance against Canal Plus’ takeover offer underscores the company’s commitment to maintaining its perceived value and independence.

The rejection not only reflects the dynamics of the specific deal but also highlights the broader competitive environment in sub-Saharan Africa’s media industry.

As both companies navigate the aftermath of this decision, industry observers are keenly watching for potential ripple effects and strategic adjustments in the ever-evolving landscape of African media.

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