Q4 was similar to the stratospheric Q2 driven by Ksh1.8bn from interest income which is similar quarter 2. I prefer interest income because its more sticky compared to fees. Other key P&L lines (F&C, staff costs) held steady versus prior quarters. Loan loss provision is very much in line with my expectations though I expect similar amount for 2009 unless we get rains in 2009. And a svelte government.
DPS was higher at Ksh3, which I don't get unless its to keep Helios happy (shareprice is only Ksh20 higher than their buying price in Dec 2007). The 10 for 1 shafre spilt I am definitely unhappy about. Clearly, Kenyans have not learned the value scarcity plays in capitalism. The other worry is that principals tend to lighten their holdings during stock spilts. Hope we won't go Safcom's way.
Capital ratios have gone down compared to 2007, which is why the higher DPS is even more of a puzzle.
Though Mwangi is very bullish, my prediction for FY profit for 2009 remains unchanged at Ksh6.2bn.