Equity Analysis /

KENYA BANKS WRAP: Q1 weak, upgrade Co-op, top pick KCB

    Faith Mwangi
    Faith Mwangi

    Equity Research Analyst, Financials (East Africa)

    Tellimer Research
    6 June 2018
    Published byTellimer Research
    Q1 18 ROE of 18.6% was higher than our 16.5% FY 18 estimate. But we view overall performance as weak, with aggregate earnings aided by a sharp decline in the loan loss provisions charge (-32% yoy vs 2018f +5%). The three key negatives were: 1) 3% non-interest revenue growth vs 2018f +6%; 2) weak balance sheet performance (+3% yoy vs 2018f 7%); and 3) weaker than expected loan book quality (9.2% NPL ratio vs 2018f 6.8%).