Sunday, April 10, 2005

Barclays AGM

Barclays Bank of Kenya held its annual general meeting on Friday morning. I arrived at KICC at quarter to 11, which I figured was enough time for the registration process - perfect - I entered the Hall at 10:59 and the AGM started at 11 a.m. sharp - finally a public event that begins on time - with a minute's silence for the Pope.

Out-going Chairman
Today's AGM turned into a love-fest as grateful shareholders bade farewell to Chairman Sam Ambundo. He joined Barclays in 1948 (57 years ago) as a clerk at the Nairobi branch, earning 83 shillings and rose through the Bank to the top - as General Manager. After resigning form there, he then joined the Board and has served for 22 years, with the last 9 as Chairman.

Barclays runs a tight ship
The Chairman stopped shareholder questions that veered off topic and voting was by "show of hands" acclamation (KANU style) even the election of directors. Unlike at the annual Kenya Airways meeting, there were no alternates - i.e. outside people seeking to join the board. Directors and auditors are re-confirmed in a matter of minutes, as shareholders appeared unsure of their rights, or were unwilling to rock this very profitable boat.

Ghost of Matiba
The first two shareholder questions to the Board, asked why Barclays was persecuting and torturing Matiba by trying to sell his school and hotel properties. These early questions were deferred to later session. But even as the Chairman mentioned that he could not comment about a matter that was in Court, he was adamant that money advanced as loans to borrowers, must be rapid since it belonged to depositors and that shareholders would bear the brunt if such loans were written off. Barclays MD, Adan Mohammed, also stressed that the Bank typically sells someone's property strictly as a last resort, and only after all other options of repayment have been discussed with the borrower. i.e. Matiba's Group have been difficult customers.

Other questions
Shareholders asked:
- For bonus shares to be given instead of dividend
- Called for a special dividend of 22 shillings to recognize the Chairman's 22 years on the Board
- The Bank to support St. John's ambulance
- The Bank to buy a bicycle for the retiring Chairman
- How does one process dividends of shareholders who have died?
- Best question: Pointed out that 10% of Barclays loans are non-performing (i.e. may turn bad and never be repaid) and this was confirmed by the Chairman. However Barclays is doing quite well, given than the average amount of non -performing loans in the Kenyan banking sector is about 25%.
- The Chairman put a halt to questions of a personal nature (and which usually are the most entertaining)

In-coming Chairman
Francis Okomo Okello was presented as the new Chairman of the Bank and proceeded to give a long winding speech - he spent about 5 minutes introducing his speech, then used about 19 big-worded adjectives such as "disarmingly modest, persuasive debater, insightful, perceptive, indelible footprints" to describe his first meeting with Chairman Ambundo some 10 years ago. Chairman sat there with an embarrassed grin on his face as some directors took catnaps during the 30-minute speech and most shareholders counted the minutes to lunch. Also, while the Ambundo had kept repeating pertinent matters into Swahili, Okello made no such effort and stuck to his written speech. The poor speech was made more glaring, given that the Adan Mohammed, had just given an impromptu and witty brief speech about the Chairman a few minutes before.

Still there's hope: Bill Clinton's first major appearance to the American public was a long boring speech he gave at the 1988 Democratic National Convention that appeared to doom his chances of leading the party - and yet 4 years later he was his party's candidate and President-elect. For Barclays, by next year, Okello should have a competent personal assistant to review his speech beforehand and he'll also be more comfortable performer in front of shareholders.

Barclays is a model company
The best-ranked companies in Kenya are all lean and efficient operations - Barclays has 1,800 employees, Safaricom has 700 and Kenya Breweries has 1,000 (down from 6,000 about ten years ago) - Compare this to government departments that employ tens of thousands of workers

Best moment
When Chairman Ambundo presented senior managers of the Bank to the audience - they were all young, Kenyan (miro's)men and women - the future and succession planning at Barclays is assured. I.e. Okello was named vice chairman last year, and Ambundo groomed him to take over the Chair this year. Also during the meeting, MD, Adan Mohammed, also announced that he aspires to rise from management to be the Barclays Chairman one day - as Ambundo did.

Worst moment
Cheap Blue Chip: The richest Bank in Kenya had a very stingy AGM - compare this to other AGM's where directors sit and eat a sumptuous lunch with shareholders who also receive gift bags, t-shirt's umbrella's, company products etc. Lunch was a bit of a let down - after lining up for 20 minutes at one of the four lines, I got my lunch box which consisted of egg, banana, cake, sausage, samosa, and a piece of chicken with a bottle of soda or water. Despite giving a healthy dividend of 14 shillings, Barclays should do more for shareholders - as they only meet once a year.

Lesson of the Day: Buy Shares
Barclays has 33,000 shareholders - 11,000 of whom own less than 500 shares. Most of the shareholders who attended the Friday AGM were rural, elderly folk - who looked like retirees, many of whom didn't speak English - but they all made a decision to buy shares.

If someone had invested 1,600 in 1986 when Barclays launched on the Nairobi Stock Exchange, those shares would be worth over 230,000 shillings today. Plus, over the last five years, they have received dividends of 14 shillings a share, except 2002 when it was 12 sh. per share. Barclays even pays dividends when its earning drop - as in 2000 the bank earned 11 sh. per share, it paid a 14 sh. dividend, while in 2002 it paid 12 sh. on earnings of 10 sh. per share. I.e. owning 500 shares gives you a cheque of 7,000 every year for the last five years, and in some years


Kenyan Pundit said...

Thanks for this update. I'm a very happy Barclays shareholder circa 1995...just too bad I could only buy a small number of shares back then. I've been able to pretty much double the number of shares I own through bonus shares so I'd rather see more of that in exchange for lower dividends. Halafu they can split just like KBL and make me even happier :) I was reading about Okello's background in the paper and was wondering just how many things can one guy be in charge of? Maybe that's why his performance was lacklustre...he has his hands in too many pots.

bankelele said...

Congrats on being a BBK shareholder - the annual dividend and bonus shares must have yielded tremendous gains for you since 1995.

As for Okello, it's pretty much the norm. Only super-directors become Chairmen e.g. Kierieni, Kirubi, H. Awori i.e. you have to be serving on several boards to be a Chairman.

Anonymous said...

Despite the hard words and long speech you all must admit that Okello will be a good addition to the bank. he has paid his dues and is much deserving of the position because of his previous work experience....i think instead of dwelling on useless things like his speech, you might want to give the man kudos..... ..

Anonymous said...

What barclays has done is gone out and found someone they believe has the experience and track record to fill ambudo's shoes. As a shareholder I believe this may be the type of guy we need to keep strong leadership at the Bank With "youth" on his side we may have alot to gain from this Miro once he get's on board. I am sure the Board and shareholders would only put their faith behind someone they thought was able. He is very highly rated as banker by KIB lets let the jamaa do his job and hopefuly lead our firm to greater hieghts instead of judging him by his speech granted he may have a lot to learn leaders are made not born.

Barclays in my opinion is still and hopefully will continue to be one of the stronger firms that are listed on the NSE.

bankelele said...

I truly believe Barclays has found a worthy successor to Ambundo.

The board, and especially the management team, are all top notch, and shareholders will continue to be happy with their shares and dividends for many years to come.

(I also said I believe the new Chairman will be more polished and have better interaction with the shareholders next year)

M said...

From what I’ve read, Okello knows his stuff and that’s why he’s on the Boards of so many other leading companies in Kenya, including Serena. Lets be real, would we not have been a slightly worried had he taken the stand and spoken in fluent Kiswahili and kept us active with jokes throughout the speech? I think it is the nature of professional people to be extremely technical in the way they communicate, and in my experience, coupled with a solid CV, this commands a lot of respect. Personally, I’m happy they’ve got a local Kenyan of such high caliber as Chairman. My Uncle from shags was there and while he may not have understood all the words said, he left the AGM very confident in the abilities of the Okello. Besides, it being a handover from Ambundo, the occasion probably called for long speeches and I guess Okello knew this when in the introductions, he said it was an occasion to celebrate the professional life of the great Kenyan that Mr. Ambundo is. He requested the Shareholders to bear with him as he gave his speech which covered his tribute to the outgoing Chairman and his own acceptance of the position as Chairman. I think it is unfair that you would judge him on the length of his speech, he was not there to entertain us! In any case in his speech, he mentioned other issues, such as who should be regarded as a National Hero or Heroine in Kenya context, issues that in my view deserve some debate as opposed to arguing over trivialities like how long the speech was! As for me with my few shares, I’m glad that Barclays continue to make me money!

Cheers all,

fkk said...

There are many traits that make a good leader and speech is just one of them.It's just too bad I guess that Sir Okello did not take a public speaking class and considering all the positions he holds you would think the guy has learnt... but oh well he will learn on the job now that he has to make a speech at least once every year, and it won't have to be about his predecessor.All said and done, I still think he is the right guy to lead Barclays to greater heights.


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