Genghis, Orchid merger plan gets CAK’s approval

Genghis Capital, the investment banking arm of Chase Bank Group, has received regulatory approval to absorb the lender’s other investment unit, Orchid Capital.

The Competition Authority of Kenya (CAK) director-general Wang’ombe Kariuki in a notice has approved the transfer of Orchid Capital’s business to Genghis Capital saying the merger will not affect competition.

“The acquirer’s turnover for the preceding year, 2014, was Sh262,117,012 while the target had no turnover; and the combined turnover of Sh262,117,012 is below the required merger threshold for mandatory notification as contained in the Merger Threshold Guidelines,” read the January 7 notice by Mr Wang’ombe.

Orchid Capital, formerly Winton Investments, is the offshore investing and wealth management arm of Chase Bank. The lender said consolidating the businesses is meant to increase efficiency by offering more services in a single location.

“Under its investment bank licence, Genghis Capital may carry on investment advisory services thus the merger aims to expose clients to diverse investment opportunities in the local, regional and foreign markets in a one-stop investment solutions model,” said Genghis Capital general manager Moses Lopokoiyit.

“We believe this shift is crucial as it will enhance our value proposition to our clients through product diversification, excellent execution services and bespoke research.” Other expected benefits will be reduced compliance costs and ease in marketing products under one brand.

Genghis Capital was licensed by the Capital Markets Authority (CMA) in 2008 while Orchid Capital was set up in 2010. Chase Group’s other subsidiary is Lighthouse Property, a real estate and management company formed in 2008.

Additional revenue

Financial services firms are revamping their investment banking units which are offering additional revenue streams from clients who are increasingly demanding more sophisticated services and products.

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.

Locally, Barclays Bank recently revived Barclays Financial Services mostly in response to foreign clients who are looking for investment opportunities in Kenya and the region.

Barclays Financial Services will offer a whole suit of services such as advisory on mergers and acquisitions, debt, equity issues and stock brokerage.

KCB is also reviving its investment banking arm, KCB Capital, and has advertised for the position of a new chief executive officer.