This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
Both EQBNK KN and COOP KN announced their Q1:15 results yesterday. COOP KN delivered 29.8%y/y growth in PBT to KES 4.5b outperforming EQBNK KN which posted 12.0%y/y growth to KES 6.1b. COOP KN seems to have won the match having given EQBNK KN several knockouts as highlighted below;

  • COOP KN’s total interest income grew by 22.8%y/y versus EQBNK KN’s growth of 12.5%y/y. In addition, COOP KN’s interest expense grew at a slower pace (26.7%y/y) compared to EQBNK KN’s growth (31.9%). Overall, COOP KN’s net interest income grew by 21.3% vs EQBNK KN’s growth of 8.6%.
  • In terms of efficiency, COOP KN’s CTI ratio improved to 49.4% in Mar-15 from 55.6% in Mar-14 outweighing EQBNK KN’s 53.9% in Mar-15 which is a slight deterioration from 51.5% in Mar-14.
  • Nevertheless, EQBNK KN gave COOP KN a knockout on book quality which maintained at 1.6% versus EQBNK KN’s 2.8% which was a slight corrosion from 2.5% in Mar-14.
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