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Investment Firm Launches Asset Management Arm

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The investment firm, Cytonn Investments Plc on Monday 11th March 2019 launched Cytonn Asset Managers Ltd (CAML) the Sarova Panafric, Nairobi, Kenya in an event that was meant to celebrate the significant milestones achieved over the last year and also launch the rebranded Cytonn Money Market Fund.

While giving his opening remarks, the Chairman of the Cytonn Investments Board, Prof. Daniel Mugendi thanked the regulators for their support and pledged to continue working with them to achieve greater results. He expressed his excitement that there was a new player in the industry, which was an indication of market maturity, noting that this also gave investors more investment options.

Cytonn Group CEO, Edwin Dande said that they are excited to be in the regulated space as CAML will have a variety of regulated products and the aim is to continue offering above-average investment solutions to clients. He emphasized on the importance of technology in investments and indicated that this will be a key focus.

Elizabeth NkuukuuCytonn’s Chief Investments Officer took the guests through Cytonn’s investment model demonstrating where CAML fitted in the overall company structure. She also reiterated that “Our clients’ success is our success. We are independent and client focused. Every day we wake up thinking about one thing; our clients.”

Madhav Bhalla, the chair of CAML’s board, outlined the milestones CAML had achieved in the past year, adding that they would continue to develop more products that speak to the needs of clients.

The Head of Unit Trust, Victor Odendo, added that regulation by the Capital Markets Authority (CMA) and the Retirement Benefits Authority (RBA) was only the beginning for CAML and that bigger things lay ahead. He promised that going forward, CAML’s focus would be on technology and automation, client service, and guaranteeing the safety of investments.

The chief guest, Hon. Nelson Gaichuhie, who is also Chief Administrative Secretary for National Treasury and Planning congratulated CAML for working with regulators to deliver trusted products to investors. He urged the management to make digitization a priority to put investments at par with other industries.

Hon. Ekwe Ethuro, HELB Chairman and a client of Cytonn expressed his pleasure that CAML was registered. He went on to say, “When you invest at Cytonn, your money will work for you,” and urged those present to let their money work for them.

In making the closing remarks, Patricia Wanjama, Head of Legal and Cytonn’s Company Secretary emphasized that investing was no longer for the privileged few and pointed out that one could join the Cytonn Money Market Fund for as little as Kshs. 5,000 only.

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National Bank Issues A Profit Warning Due To Higher Loan Impairment And Restructuring Costs

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The National Bank of Kenya (NBK) has issued a profit warning for the financial year ended December 2018 citing higher loan impairment charges and restructuring costs. The bank which is a listed lender of The Nairobi Securities Exchange will now be expected to post at the very least  25% lower earnings for the year ending December 2018 than the previous year. The anticipated drop means its net profit for the period is unlikely to surpass Sh308 million. “(This is) primarily due to increased loan impairment charges beyond initial projections due to a revision of valuations and values recoverable from the non performing loan portfolio,” said the firm in a cautionary statement.

“During the year the group incurred a one off restructuring cost (voluntary early retirement programme) as part of wider business alignment, the full benefit will be realized in 2019,” the statement added. NBK has in the recent past registered a series of poor performance that has pushed its survival into an uncertainty mode.

The lender is in the grip of an operational crisis, stuck in a negative liquidity position as at the end of the first nine months of the year even as plans to sell it remain in limbo. The NBK’s nine-month profit dipped by 84 per cent to Sh21.97 million as a result of reduced lending.

Loans and advances to its customers dropped by Sh9.9 billion or 17 percent to Sh48 billion compared to last year’s nine month position of Sh57.88 billion. The Treasury has approved for sale of NBK among other two State owned lenders who are, Consolidated Bank (CBKL) and the Development Bank of Kenya (DBK) along with a number of other parastatals.

The plans are, however, yet to take off even after the State sought to hire a chief manager in charge of transactions as it moved to unlock the stalled sale. The NBK’s core capital stood at Sh2.34 billion at the end of September 2018, about four times thinner than the Sh9 billion it had in September last year, leaving it significantly in breach of regulatory capital ratios and therefore constrained in its ability to lend.

Although its liquidity ratio is above the minimum requirement of 20 percent, the NBK’s total capital to total risk-weighted assets stood at a deficiency of or negative 10.4 percent as at the end of the first nine months of the year. The NBK’s core capital to total deposit liabilities stood at a negative or deficiency of 5.5 percent while core capital to total assets stands at negative 7.9 percent.

Faced with such a dicey situation, the lender has a constrained room to take in more deposits. The Treasury has injected limited amounts of capital into the lender which has not been sufficient to put the banks in the right legal position on the ratios. The NBK was compelled to continue running on constrained capital after the Treasury and National Social Security Fund (NSSF) missed own-imposed deadline of injecting Sh4.2 billion fresh capital.

The NBK said late last year that it was still awaiting the money that ought to have come in by end of September, according to the formal commitments made by the Treasury and the National Social Security Fund (NSSF) in March last year. “In March 2018, the principal shareholders gave formal commitment for a comprehensive capital solution. The board notes that this process is ongoing,” said CEO Wilfred Musau. “The capital injection will unlock and bolster the key pillars of our growth and place the bank in even a better probability path in the long-term.”

But the delay leaves the NBK in a precarious situation given that the same government has for long been mulling over merging the bank with DBK and Consolidated Bank. The NSSF owns 48.1 percent of the NBK while Treasury holds 22.5 percent stake, making them the two principal shareholders.

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Kenya’s Safaricom Surpasses 30 Million Customers

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Kenya’s telecommunication giant, Safaricom announced on Thursday that it has passed the 30 millionth customer milestone, cementing the firm’s position as the most preferred mobile service provider in the country. To celebrate the milestone, Safaricom is thanking its customers for their loyalty through compelling Bonga Points offers beginning Friday 22nd March, 2019.

“We would like to thank each of our more than 30 million customers for choosing Safaricom as their preferred network which has contributed to our achievement of this remarkable and historic milestone. This breakthrough reflects our customer’s vote of confidence in our purpose of Transforming Lives. Last year as we turned 18, we announced our brand promise of ‘Nawe Kila Wakati’, where we renewed our commitment to always deliver great value on our network,” said Sylvia Mulinge, Chief Customer Officer – Safaricom.

Between Friday and Sunday, all Safaricom customers will have the option to redeem 1 Bonga Point for KES 1 worth of airtime to a limit of KES 100 airtime, or 1 Megabyte of data valid 7 days to a limit of 1 GB, enjoying a 67% discount. Customers can redeem the offers as many times as they wish for the three days by dialing *444*3#.

Safaricom will also extend the 1 to 1 offer to the Neon Kicka 4, which will be available for 3,499 points. Customers with fewer points can top up the difference in cash at KES 1 for 1 point. The device will be available at all Safaricom shops and all dealer outlets countrywide while stocks last.

In October 2018, Safaricom marked its 18th anniversary since the company was founded in 2000.

Over the last 18 years, Safaricom customers have enjoyed a variety of transformative products and services.

Safaricom has also spent more than KES 100 billion in the last three years ensuring more than half of Kenya’s population has access to high-speed mobile connectivity through 4G while 3G and 2G networks reach more than 91 per cent and 96 per cent of the population respectively.

Besides its products and network, Safaricom has also placed a lot of focus in being close to its customers through initiatives such as ‘Ndoto Zetu’.

“We continue to appreciate our customers through the ‘Ndoto Zetu’ initiative, where we are coming together to make a difference to their communities, inspired by their dreams. Our objective is to make a positive change across more than 500 communities,” said Sylvia.

 

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Delays In Approving Project Causes Cytonn Protest

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Cytonn Investment, a real estate company has blamed lengthy regulatory processes for delaying its projects which has forced them to base their completion on approval dates. The Chief Executive Edwin Dande said that its thre-tower mixed-use skyscraper project worth  Sh20 billion that was intended to raise 35 floors each in Kilimani has been delayed after some residents objected alongside National Environment Management Authority (Nema) saying it would a disruption in the area. He adds that similar delays happened to their Karen project whose commencement was first reported in August 2016. “The four-acre parcel of land for Cytonn Towers is intact and we are soon meeting residents neighbouring our project site to seek a solution that works for all of us. These issues take a long time … for instance, our Sh5.5 billion project with 60 luxury units Situ Village in Karen that is to commence after a three-year battle before the Nema tribunal,” he said.

For every planned project, proponents must file a request with the Nema disclosing all details and architectural drawings as well as other regulatory agencies with the public notified to file an objection within 30 days of the notice being published in the Kenya Gazette and daily newspapers.

Mr. Dande who was speaking after he signed a Sh650 million loan with SBM Bank said that The Alma project which has 407 units comprising of one, two and three- bedroom apartments is set for completion by end of year while Sh12 billion project in Ridgeways with 700 units is expected to be done by  next year. SBM Bank deputy chief executive Jotham Mutoka welcomed the partnership saying the bank was looking forward to funding other big-ticket real estate projects as well as fund mortgages. “We are eyeing business at the corporate, SME and retail level in our match to becoming a tier one bank. We bought off third-tier Fidelity Commercial bank and last year added Chase Bank to our portfolio of acquisitions bringing our branch network to 52,” he said.

Mr Dande said apart from the bank loan, the company had attracted Sh11 billion from 3,000 investors and more funds received from Finnish-based listed firm Taareli.

Currently, Cytonn manages Sh82 billion worth of investments in Nairobi and Kiambu with plans afoot to expand residential developments to other major towns in Kenya.

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