HSBC raises Nairobi’s profile as financial hub
Posted Wednesday, March 16 2011 at 00:00
International banking group HSBC has set up shop in Nairobi, stepping up financial services firms’ race to secure a foothold in East Africa’s budding economies.
The London based banking group said it had acquired a license from the Central Bank of Kenya to open a regional office. “I can confirm we have a rep office in Kenya,” said the bank in a statement on Tuesday.
Visa International, a payment systems services company, announced last week that it will start operations in Nairobi, while US bank JP Morgan Chase said it was also eyeing an office in the Kenyan capital.
Jaap Van Luijk, who has been appointed representative for HSBC Kenya and the east African region, declined to comment on the issue.
He said full details of the operation will be announced in about two weeks.
Increasing trade ties between east African countries and the developed and emerging economies are seen as the main attraction to the region for the international banks.
“There’s a lot of focus on Africa because our senior management sees a significant growth opportunity over the next 10 years and we’re seeing our clients increasingly move here, be it an Indian multinational or a German multinational,” Mr John Coulter, the JP Morgan CEO for Sub-Saharan Africa, told Reuters African Investment Summit on March 7.
Headquartered in London, HSBC is an international banking and financial services organisation with a network that comprises about 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.
It is listed on the London, Hong Kong, New York, Paris, and Bermuda stock exchanges.
Analysts said HSBC will be looking to offer transactional banking services such as foreign exchange and trade finance to its clients.
HSBC’s entry will enhance Nairobi’s claim to a regional financial hub status, backing recent intentions by Treasury to establish an exclusive financial district in the capital.
The bank’s entry will also open a window for more foreign investors.
“It will be good for other market players,” said Suntra Investment Bank chief executive Michael Gichohi, adding that the move is not surprising since Kenya is becoming attractive to foreign investors wanting to venture into the continent.
Other international investment banks that have set up shop include Russian investment bank Renaissance Capital, and Pan African investment group African Alliance.
Renaissance Capital bought the license of defunct stockbroker Francis Thuo and Partners in 2007.