2011 Q1 Financial results review (Big Five Banks)
Market capitalization | ||||
10-Jun-11 | ||||
Shs '000 | ||||
1 | Equity Bank | 93,495,120 | ||
2 | Barclays Bank | 91,792,958 | ||
3 | Kenya Commercial Bank | 75,229,313 | ||
4 | Standard Chartered Bank | 68,898,512 | ||
5 | The Co-operative Bank of Kenya | 57,973,340 | ||
Q1 2011 | Q1 2010 | % | ||
Shs '000 | Shs '000 | Change | ||
Operating Income | ||||
1 | Kenya Commercial Bank | 7,911,126 | 6,492,251 | 21.85% |
2 | Equity Bank | 6,518,649 | 4,654,063 | 40.06% |
3 | Barclays Bank | 6,191,593 | 6,068,962 | 2.02% |
4 | The Co-operative Bank of Kenya | 4,584,835 | 3,249,059 | 41.11% |
5 | Standard Chartered Bank | 4,109,708 | 3,382,776 | 21.49% |
Operating Expenses | ||||
1 | Standard Chartered Bank | 1,795,667 | 1,308,110 | 37.27% |
2 | The Co-operative Bank of Kenya | 2,536,582 | 1,947,802 | 30.23% |
3 | Equity Bank | 3,649,949 | 2,993,842 | 21.92% |
4 | Barclays Bank | 3,787,181 | 4,066,129 | -6.86% |
5 | Kenya Commercial Bank | 5,404,751 | 4,588,505 | 17.79% |
Profit Before Tax | ||||
1 | Equity Bank | 2,868,700 | 1,660,221 | 72.79% |
2 | Kenya Commercial Bank | 2,506,375 | 1,903,746 | 31.65% |
3 | Barclays Bank | 2,404,412 | 2,002,833 | 20.05% |
4 | Standard Chartered Bank | 2,314,041 | 2,074,666 | 11.54% |
5 | The Co-operative Bank of Kenya | 2,048,253 | 1,301,257 | 57.41% |
Total Tax | ||||
1 | The Co-operative Bank of Kenya | 407,511 | 259,623 | |
2 | Equity Bank | 569,914 | 461,764 | |
3 | Standard Chartered Bank | 673,336 | 633,991 | |
4 | Kenya Commercial Bank | 732,140 | 571,936 | |
5 | Barclays Bank | 872,572 | 629,511 | |
Effective Tax Rate | ||||
1 | Equity Bank | 20% | 28% | |
2 | The Co-operative Bank of Kenya | 20% | 20% | |
3 | Standard Chartered Bank | 29% | 31% | |
4 | Kenya Commercial Bank | 29% | 30% | |
5 | Barclays Bank | 36% | 31% | |
Profit After Tax | ||||
1 | Equity Bank | 2,298,786 | 1,198,457 | 91.88% |
2 | Kenya Commercial Bank | 1,774,235 | 1,331,810 | 33.22% |
3 | The Co-operative Bank of Kenya | 1,640,742 | 1,041,634 | 57.52% |
4 | Standard Chartered Bank | 1,640,705 | 1,440,675 | 13.88% |
5 | Barclays Bank | 1,531,840 | 1,373,322 | 11.54% |
Cost to Income Ratio | ||||
5 | Standard Chartered Bank | 44% | 39% | 12.99% |
4 | The Co-operative Bank of Kenya | 55% | 60% | -7.71% |
3 | Equity Bank | 56% | 64% | -12.96% |
2 | Barclays Bank | 61% | 67% | -8.71% |
1 | Kenya Commercial Bank | 68% | 71% | -3.34% |
Total Assets | ||||
1 | Kenya Commercial Bank | 270,943,498 | 220,665,114 | 22.78% |
2 | Barclays Bank | 178,617,083 | 168,692,727 | 5.88% |
3 | The Co-operative Bank of Kenya | 169,452,916 | 121,748,923 | 39.18% |
4 | Equity Bank | 153,488,711 | 110,152,615 | 39.34% |
5 | Standard Chartered Bank | 145,170,160 | 124,105,077 | 16.97% |
Total Equity | ||||
1 | Kenya Commercial Bank | 40,888,938 | 24,032,538 | 70.14% |
2 | Barclays Bank | 32,724,788 | 26,774,717 | 22.22% |
3 | Equity Bank | 26,587,229 | 23,368,171 | 13.78% |
4 | The Co-operative Bank of Kenya | 21,964,471 | 17,176,306 | 27.88% |
5 | Standard Chartered Bank | 21,394,537 | 15,955,754 | 34.09% |
Return on Equity | ||||
1 | Equity Bank | 35% | 21% | 68.59% |
2 | Standard Chartered Bank | 31% | 36% | -15.07% |
3 | The Co-operative Bank of Kenya | 30% | 24% | 23.18% |
4 | Barclays Bank | 19% | 21% | -8.74% |
5 | Kenya Commercial Bank | 17% | 22% | -21.70% |
Price to Earnings Ratio | ||||
10-Jun-11 | ||||
1 | The Co-operative Bank of Kenya | 9.46 | ||
2 | Equity Bank | 10.17 | ||
3 | Standard Chartered Bank | 10.50 | ||
4 | Kenya Commercial Bank | 11.46 | ||
5 | Barclays Bank | 12.93 | ||
Summary Analysis
Equity Bank is the most profitable of the big five banks; the bank has grown its top line while keeping a tight lid on costs as can be seen from its low cost to income ratio.
Standard Chartered is the most efficient bank but is not growing aggressively.
Barclays is relatively overvalued by the market: it has the lowest after tax profit of the big five but is second in terms of total market capitalization.
Equity and Co-operative banks are benefiting from a lower tax rate due to a five year concession given to newly listed companies. The lower tax rate translates into a higher after tax profit and will allow the two banks to increase their shareholder's equity faster than their peers over the next few years.
Taking into account the current share prices, growth momentum and performance in the first quarter; Co-operative Bank and Equity Bank are the best value shares as at June 10, 2011.
