Wednesday, January 26, 2005

National Bank of Kenya

The oft-rumoured about Bank launched a new slogan yesterday, and are now - “the bank where you belong.” In addition, Finance Minister Mwiraria, in his capacity as main shareholder, announced further plans to restructure the bank. At the urging of the World Bank, banks (incl. NBK with Kshs. 17 billion) will transfer all their bad debts (non-performing loans) at a fraction of their value to a new bad debts agency that will then collect future the payments – thereby clearing up the bad debt problem off a bank’s books. However, one problem is that until Kenya’s judiciary is fully straightened out, borrowers (with bad loans) can tie up banks (and the new agency) in court in a bid to stave of payment or sale of their assets. Also Banks are loathe to admit that they made bad investments and don’t want to get short-changed when they sell them off. The Minster also indicated that the Government plans to sell off its 24% stake in NBK by December 2005

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