Barclays starts trading at NSE with its revived investment unit

Barclays Bank has re-activated its investment banking business on growing demand for brokerage services especially from foreign investors.

Barclays Financial Services, a subsidiary of the bank, began trading on the Nairobi Securities Exchange (NSE) on Wednesday, joining a host of banks active in the business.

Jeremy Awori, Barclays chief executive, said the division was revived due to the growing demand for investment banking and brokerage services.

“We are seeing demand, especially from those investors entering the country. They prefer to work with brands that they are familiar with,” he told the Business Daily.

The subsidiary will offer a whole suit of services such as advisory on mergers and acquisitions, debt, equity issues and stock brokerage. Previously it has been carrying out work on a small scale.

The move came as its parent company, Barclays Plc, said it was slashing a 1,000 jobs from its investment banking globally.

Commercial banks are reviving their investment banking and brokerage arms to diversify their incomes. The subsidiaries get access to potential clients from the parent bank looking for advisory services, creating a symbiotic relationship.

“I believe it’s aimed at leveraging their banking relationships into ability to offer broader capital markets services to clients, like equity and debt raising. Plus (they) can offer broader financial services like stockbroking to retail clients,” said Kestrel Capital chief executive Andre DeSimone.

In July 2014 Equity Bank went on a talent poaching spree to revive Equity Investments Bank, a move that paid off as the unit was able generate revenue by bagging large transactions from the sale of private equity Helios’s shares in Equity Bank in late 2015.

READ: Equity brokerage arm gains most in 2015

KCB recently advertised for a managing director for KCB Capital, its investment banking unit. It expects the new head of the subsidiary to grow the transaction advisory and brokerage business.

Mr DeSimone said he expects increased competition as more commercial banks set up or revive their brokerage firms.

Public private partnerships, corporate finance, project finance, wealth management and regional deals are other areas that investment banks are looking at.

Data from Thomson Reuters/Freeman Consulting shows that investment banking fees in sub Sahara Africa for 2015 stood at $476.4 million (Sh47 billion), a 24 per cent increase from $384 million (Sh38 billion) earned a year before.

Most of these deals were from South Africa but Kenya’s share is expected to increase as projects such as Lapsset corridor gain traction.

The NSE expects Barclays’s entry into the market to increase the profile of the bourse, especially to foreign investors.

“The participation of Barclays in our markets is a clear indication of the Exchange’s attractiveness as an investment destination,” said NSE chief executive Geoffrey Odundo.