Category Archives: news

iRem

ABC Bank launches money remittance service to India – 20th November, 2015

ABC Bank has launched a money remittance solution to facilitate fast, secure and cost-efficient money transfers from Kenya to India. This is part of the bank’s strategy to grow its reach in to new frontiers.

The new solution, dubbed iRem, enables ABC Bank customers and non-customers alike to make person-to-person, business-to-business and business-to-customer funds transfer in the Indian currency, Rupee, at competitive forex rates. Funds are remitted efficiently and promptly since the service is connected to SWIFT (Society for Worldwide Interbank Financial Telecommunication) which provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.

ABC Bank is seeking to tap in to the increasing trade between the two countries, which saw India’s exports in to Kenya grow to USD 4,118 billion (Ksh. 42.7 trillion) in the financial year 2014/15, according to India’s High Commission in Kenya website. There are also many investment partnerships between Kenya and India.

Besides the large population of Asian Kenyans, there is an increasingly large number of Indians living and working in Kenya. Additionally, over 18,000 Kenyans are issued with visas to study and work in India.

“Essentially, the remittances between the two countries are increasing in direct proportion to the growing socio-economic activity between them, hence the need for reliable and cost effective funds transfer solutions”, said ABC Banks’ Group General Manager, Peter Kinyanjui.

The new product- iRem- is an addition to the bouquet of local and international money transfer services that ABC Bank has rolled out in the last couple of years to facilitate a seamless financial interconnectivity of people in different parts of the world.

Kinyanjui added: This product is more than a remittance solution; it will further catalyze the entrepreneurial acumen and prop up the social support system of the Indian communities in both countries.

ABC Bank maintains stable credit rating- 29th October, 2015

The Global Credit Rating Company (GCR) has upheld last year’s ABC Bank upgraded rating of national scale short term A2 (KE) and long term BBB (KE) with the outlook accorded as Stable.

An A2 rating, according to Fitch Ratings, is a very high credit quality rating and denotes expectations of very low default risk. It indicates a very strong capacity for payment of financial commitments not significantly vulnerable to foreseeable events. On the other hand, a ‘BBB’ rating is good credit quality and indicates default risk is currently low, with adequate capacity for payment of financial commitments.

The favourable rating comes on the back of the bank’s improved capitalization, enhanced risk management process, sufficient liquidity buffers and moderate earnings profile. Other factors leading to the rating include the bank’s focus on its leading position in providing affordable trade and asset financing products to the vibrant SME and corporate segments, as well as its expansion of client portfolio to include all market segments. The bank has in the last couple of years made a concerted effort to tap in to the local and international remittances segment even as inflows from the Diaspora community continue to increase.

“We are energized by the positive rating. It positions us as having safe and sound financial health backed by our capital raising efforts through the private bond issue last year’’, noted ABC Bank Group Managing Director Shamaz Savani.

The bank issued a Ksh.1 billion private bond in May 2014 to raise additional capital following revised Central Bank of Kenya prudential guidelines in 2013 requiring banks to maintain a higher capital conservation buffer. The issue was oversubscribed by 57 percent following huge investor enthusiasm. As a result of the cash call, ABC Bank grew its total regulatory capital by 57.2 per cent from 2013 to Ksh. 2.9 billion in 2014, driven by an increase in retained earnings.

In spite of a higher absorption of funds to support lending to SME and corporate clients, the bank’s liquidity ratio has remained solid and in line with the regulatory requirements. The bank also took a strategic decision to maintain the liquidity ratio at a low of 25 percent and a high of 32 percent to optimize fund utilization and grow the loan portfolio.

Savani added: “The positive rating status is a reflection of the deliberate steps we have taken in effecting positive operational changes in the business, including the enhanced funding profile and positive internal growth. We have appropriately deployed funding, improved profitability while maintaining credit protection factors and diversified our income streams.”

In an effort to bolster its delivery channels, ABC Bank has invested in innovation to increase its customer touch points. It has partnered with 15 Saccos across the country to provide current accounts and trade finance facilities to their members. It also entered in to an agency banking agreement with Postbank last year to support its retail outreach strategy.

ABC Bank’s strength is also anchored on its market diversification through its subsidiaries- Nairobi-based stock brokerage ABC Capital, ABC Insurance Brokers and ABC Capital Bank-Uganda.

“Plans to roll out new branches in prime locations in Nairobi are at an advanced stage. These will, besides expanding our presence, take our services closer to our increasingly growing clientele base as Nairobi continues to grow as a regional business hub,” Savani hinted.

Central Bank of Kenya Press Release on Imperial Bank Limited (In Receivership) – October 27, 2015

The Central Bank of Kenya (CBK) received a report on the state of financial affairs of Imperial Bank Ltd. (In Receivership) from the Kenya Deposit Insurance Corporation (KDIC). This follows KDIC’s appointment by CBK as receiver for Imperial Bank Limited (IBL) on October 13, 2015, according to the provisions of the Banking Act and of the Kenya Deposit Insurance Act. The appointment of KDIC as a receiver for IBL was done in the interest of IBL’s depositors, creditors, and members of the public.

CBK has reviewed the report, which confirms fraudulent activities of substantial magnitude, and the misrepresentation of IBL’s financial statements. These activities relate largely to irregular granting of loans by IBL’s management, contrary to the legal and regulatory requirements, and the internal policies of IBL. In particular, these irregular loans were a violation of the statutory limit of lending to a single borrower, and inadequate loan loss provisions, thereby overstating IBL’s capital adequacy position.

The fraudulent activities have resulted in a significant shortfall in IBL’s capital position. Nevertheless, CBK and KDIC consider IBL to be viable and have examined options that will lead to the prompt reopening of the bank. These options require the shareholders to inject new capital to meet the identified capital shortfall. The ultimate objective is to ensure that the reopened bank will remain viable.

CBK and KDIC met today with the bank’s shareholders and presented a proposal that will enable reopening of the bank and a resumption of operations. The proposal will require the injection of new capital, conversion of some of the large deposits to equity, recovery and collateralization of the fraudulent loans, as well as a change of Board of directors and senior management. The proposal envisages full access to small deposits, and a structured schedule of repayment to large depositors. CBK expressed its expectation that an agreement with shareholders should be reached enabling the bank to reopen in a month’s time.Shareholders appreciated the proposal and expressed their strong commitment to reopen the bank quickly. Shareholders requested to consider the proposal over the next few days and to come back with an implementation plan for the way forward. In parallel, CBK and KDIC will on Wednesday, October 28, 2015, meet some representatives from a cross-section of IBL’s depositors to brief them on these developments.

In the meantime, steps are being taken to facilitate the recovery of the funds that were obtained irregularly from IBL. A forensic audit and other investigations are also ongoing on the culpability of these fraudulent activities.

CBK and KDIC will continue to work closely with IBL’s shareholders and all concerned parties to facilitate an expeditious resolution. CBK and KDIC will communicate further as the way forward is clarified.

CENTRAL BANK OF KENYA

October 27, 2015

Kenya Bankers Association Statement on Imperial Bank being placed under recievership- 14th October 2015

The Central Bank of Kenya (CBK) on 13th October 2015 appointed Kenya Deposit Insurance Corporation (KDIC) to assume management and control of Imperial Bank Ltd. for a period of 12 months.

In a joint statement issued by the regulators, the market has been advised that CBK and Capital Markets Authority are working closely with the Board of Imperial Bank and KDIC (Formerly Deposit Protection Fund Board).

The press statement by the regulators advises that the developments at Imperial Bank were in fact brought to the attention of CBK by the Board of Directors of Imperial Bank. It is therefore our view that this issue is isolated to the bank, and is neither systemic nor an indication of instability in the banking sector overall.

Furthermore, Central Bank in a separate statement issued on 13th October 2015 has assured members of the public that Kenya’s banking sector remains safe and robust.

Central Bank also has confirmed the speculated list of banks facing closure, which is circulating on social media, is a rumour that is best avoided.

For questions and queries regarding Imperial Bank, please contact KDIC during office hours, Monday to Friday – 8.30 am to 4.30 pm, on telephone number 0770887992/2863813 or by e-mail address: customerservice@depositinsurance.go.ke.

For specific questions about ABC Bank, please write to talk2us@abcthebank.com or call/WhatsApp 0701 700 700.

ABC Bank reaches out to UK Diaspora with GBP Debit card- 14th August 2015

ABC Bank has become the first Kenyan bank to introduce a British Pound (GBP) Debit MasterCard.

The new card is suitable for Diaspora customers in the UK. Kenyan business and leisure travelers to the UK can also deposit GBP in their ABC Bank accounts and access it while in the UK, thereby avoiding exchange rate losses. The card is also useful for UK expatriates. It provides them easy and convenient access to their funds held in their ABC Bank accounts. It also allows them to withdraw cash at MasterCard ATMs, pay for goods and services at point of sale terminals in the UK, and over the internet. Additionally, the card is EMV enabled, making it a secure substitute for cash.

The introduction of this card is part of the bank’s strategy to bolster its strategy for Diaspora customer acquisition. ABC Bank’s Head of Diaspora Banking, David Mburu said the bank entered the UK market last year and has sustained a marketing campaign to grow its presence there as recognition of the growth of the segment.

Mburu added: “Convenience to the customer is always the starting point for us; it forms an integral part of our consumer strategy as a bank.”

The launch of the GBP debit card comes at a time when there is a growing number of local entrepreneurs importing and exporting commodities between Kenya and the UK and addresses the challenge of carrying cash while traveling.

“If you have a business in Kenya and you need GBP in UK then this is your solution. You can deposit your GBP in Kenya, and shop with the GBP card in UK. It doesn’t get better than that,” noted ABC Bank General Manager, Peter Kinyanjui.

“ABC Bank recognizes the important role Kenyans in Diaspora are playing in economic development here at home, and we are giving them value added services to catalyze and facilitate that process. With the benefit of convenient access, our Diaspora customers can now bank here the same way they would in the UK,” added Kinyanjui.

Last year, the bank launched a US Dollar debit card and a money transfer solution that allows Kenyans in the Diaspora to transfer funds from their accounts to mobile wallets. Locally, the bank launched a four-in-one prepaid card in partnership with EMO Society. The Emo Connect card, designed for both Diaspora and local members, is a prepaid bank account card, insurance card, membership card and loyalty card, all in one.

Furthermore, the bank will soon launch a multi-currency card, which will facilitate the convenient usage of different currencies including the Dollar, Rand, Dirham and the British Pound.

In addition to offering them custom-made financial solutions, the bank also provides Diaspora customers with professional advice on investment opportunities available in Kenya and gives them the necessary financial support for investment.

Emo launch

Rift Valley farmers get payment card solution from ABC Bank and EMO Society – 20 June, 2015

Farmers in the Rift Valley region can now receive payments for their produce as well as make payments for various farm inputs and services using a first-of-its kind debit card courtesy of ABC Bank and EMO Society. Emoconnect Mastercard is a bouquet of benefits; it is a prepaid bank account card, insurance card, membership card and loyalty card, all in one.

Besides the numerous benefits, the card addresses the challenge of carrying multiple cards, caters for local and Diaspora members, can be used for online transactions and is also EMV compliant, making it secure to use.

The society has over 17,000 members both in Kenya and the Diaspora, and had been working on identifying a suitable membership card for its members. Additionally, members have in the past lost their crops or livestock to natural occurrences without compensation because of lack of affordable insurance cover.

They and their families have also not had access to medical cover, thus incurring huge healthcare costs. However, with the new card solution, members now have a reprieve in form of highly discounted insurance products courtesy of Emo Partners Madison, AMACO and APA Insurances.

Members will access their funds through a wide range of outlets which include ABC Bank Branches and Agents, all Kenswitch ATMs and all Mastercard branded ATM’s worldwide. On the other hand they can top up their Emoconnect cards at all ABC Bank branches/agents, Emo Agency outlets or via Mpesa.

“ABC Bank is confident that this product is truly revolutionary and ushers in a new way of accessing financial services for Emo Society members, and will enable them fully exploit the benefits of the integrated services at affordable cost and user friendly system”, said ABC Bank Card Centre Manager, Dominic Muriithi, during the launch.

With this new product, Emo Society intends to reach out to other potential members to take up the Connect card and start enjoying the benefits that come with it. EMO encouraged members to take up the card in large numbers.

“The society is committed to working with various partners to negotiate for more benefits that will enable all members to tap in. With the new card, members who would otherwise be transacting using cash now have the option of operating with a less risky cashless mode”, explained an Emo Representative at the launch.

To make it easy to apply for the card, the society has introduced a mobile solution whereby members would dial *269*90# and they will be guided accordingly. Cards will be delivered to be collected at a nearest Emo Agent. This is truly digital added the Emo Representative.

Muriithi added: The introduction of this card has comes at the right time when devolution has indeed opened up the counties, making them new business hubs in the regions. That means an increased need for comprehensive yet tailor-made financial solutions to facilitate growth and success in business.

Google Hangout

ABC Bank scores a first with entrepreneurship Google+ Hangout – 26 May, 2015

In a bid to engage and connect with customers and the general online community, ABC Bank has trodden where most Kenyan corporates dread. The bank has become the first financial institution to host a Google+ Hangouts on Air, dubbed #ABCofBiz.

The highly successful session is the first in a series of similar hangouts that the bank plans to conduct to enhance its visibility and customer acquisition by exploiting technology.

The hangout brought together a panel of different extractions of expertise to discuss ‘common mistakes entrepreneurs make’ and ways of avoiding them to propel their businesses to success. The panelists included Professor Bitange Ndemo from the University of Nairobi, June Gathoni, Director SME Resource Centre, entrepreneurs Eric Kinoti, Murori Kiunga and pioneer comedian Churchill Ndambuki.

Although many Kenyan corporates have Google+ accounts, few have used hangouts to interact with their customers. The hangout attracted hundreds of viewers online and generated a lot of audience engagement. This is attributable to the large online community of young tech-savvy entrepreneurs whose emergence has heralded a new era of heightened competition for the millions of social media users in Kenya, majority of whom had their first internet experience on their mobile phones.

Using Google+ Hangouts to interact with customers offers business several benefits, such as the luxury of meeting many clients simultaneously without leaving the office, fast feedback on products and services, and the ability to produce own content at a low cost, which can be published on YouTube.

Amecea ground breaking

ABC Bank in Ksh. 700 million AMECEA project funding – 26th May, 2015

ABC Bank has financed a Ksh. 700 m construction project by AMECEA (Association of Member Episcopal Conferences in Eastern Africa) in the up-market Lavington area of Nairobi. The ground breaking ceremony was held on 26th May.

ABC Bank Group CEO Sridhar Natarajan and Group General Manager Peter Kinyanjui attended the ground breaking ceremony. “Through this financing agreement, we are reaffirming our commitment to support our customers’ aspirations. Our vision is to enable you achieve the extra ordinary, and I believe what we are witnessing here today is beyond the ordinary”, said the Group CEO during the ceremony.

The new property will be located in Nairobi’s up market, Lavington area. Once complete the property will house a shopping mall, furnished apartments and offices. This is expected to plug the gap in the property market demand.

AMECEA is an institution of the Catholic Church in Eastern Africa, which exists to empower the society financially, alleviate poverty and support sustainable development in the region. This construction project will create a sustainable revenue stream to enable the organization fulfill its mandate.

Similarly, ABC Bank’s strategy is anchored on a commitment to contributing to the improvement of livelihoods of Kenyans. To achieve this, the bank continues to seek collaborations with like-minded institutions to support initiatives that will advance that objective.

Banking Awards-2015

ABC Bank wins Think Business Product Innovation Award – 8th May, 2015

ABC Bank trounced the large pack of entries in this year’s Think Business Awards to emerge 1st Runners Up in the Best Bank in Product Innovation category. The award winning product was the electronic Warehouse Receipt Financing solution the bank introduced in March in partnership with East Africa Exchange (EAX).

The solution enables farmers protect their produce against storage-related damage and negotiate for better prices.

We’re glad that our efforts to develop revolutionary products are being recognized by industry experts. This award signifies the strength of our business, the efforts of our staff and most importantly, the continued support from our customers.

EAX partnership signing 2015

ABC Bank and East Africa Exchange sign warehouse receipt financing agreement- 10th March, 2015

ABC Bank has signed an agreement with East Africa Exchange (EAX) to help grain farmers and traders obtain financing against their produce deliveries. This will also enable farmers protect their produce against storage-related damage and negotiate for better prices.

With warehouse receipt finance, a farmer or trader will deliver his produce to a warehouse that has been approved by the bank. The bank will then issue a receipt vouching for the quantity and quality of produce being stored. The bank will then take the receipt as collateral and provide financing to the farmer or trader.

Through the deal, ABC Bank will provide finance for electronic warehouse receipts to grain farmers and traders supported by EAX, provide clearing and settlement services platform integrated with the national payment systems and mobile banking solutions.

“ABC Bank is committed to providing customized financial solutions to small and medium enterprises, including agribusinesses,” said ABC Bank Group Managing Director, Shamaz Savani, noting that agriculture is a key economic pillar that ought to be supported through financial partnerships to ensure the country attains food security to support the growing population.

EAX is a commodity exchange that aims to increase regional market efficiency and give the East Africa’s growing population, particularly smallholder farmers, better access to commercial markets, and link them to agricultural and financial markets so they can get competitive pricing for crops and access to finance.

Savani added: “Grain markets in Africa generally suffer from a range of constraints. Smallholder farmers are particularly affected owing to their vulnerability to price fluctuations and their weak bargaining position. With warehouse financing solutions like this, they will now be at a vantage point to bargain for better prices for their produce, thereby enhancing their capacity to produce more, create employment and contribute more to economic development”.

“The key advantage of a warehouse receipt is it resolves a whole series of problems, including protecting the traders from losing their produce in their own storage before reaching the market, and is also a great way of freeing up financing for the farmer,” said Constantine Kandie, Kenya Director for EAX.