Financial firm raises profile to woo rich investors

This marks a significant shift from CfC Financial Services strategy where 90 per cent of the brokerage firm’s business was sourced from retail investors.

But now by tapping into a global network of financial services firms under the umbrella of Standard Bank, Nkoregamba Mwebesa, CfC Stanbic Financial Services managing director is keen to widen the firm’s product offering and reach.

“We will target institutional corporates both local and foreign as well as high networth and retail clients in a preferred ratio of 60:40,” says Mr Mwebesa.

Cushioned by a capital base of Sh235 million, CfC Stanbic Financial Services starts off on a sound financial footing, side-stepping the capital woes that have dogged some of the NSE’s market players.

Despite the depressed stock market, Mr Mwebesa remains optimistic that a market upturn riding on regulatory-driven governance reforms will reward players who position themselves to serve various client segments at the stock market.

There is anticipation among many stock market players that new CMA guidelines on ownership and management of stockbroking firms will level the playing field as an era marked by close-knit cartels in the local stock market comes to an end.

Towards this end, a number of stock market players who had remained in the back benches as huge deals were netted by players perceived to have patronage of sorts are placing systems in place to operate in a new era of equities trading.

“In a downturn you don’t survive by saving. We’re investing in systems that enable us to take advantage of the stock market once it rebounds,” said Mr Mwebesa.

Shift focus
The re-branding of CfC Stanbic Financial services makes two the number of firms that have shed CfC holding group’s green colours for Standard Bank’s blue in a process sparked off by Standard Bank’s acquisition of CfC Holdings Ltd last year.

CfC Stanbic Bank was borne out of the merger of CfC and Stanbic Banks following Standard Bank’s acquisition of CfC Holdings last year.

With the latest round of re-branding, Kitili Mbathi, the managing director of CfC Stanbic Holdings said the focus will now shift to the two insurance firms —CfC Life and Heritage Insurance —to see how best to re-brand the two.

“They (Heritage and CfC Life) will remain as they are as we seek closer integration within the Group,” said Mr Mbathi.

Besides a bank and a brokerage firm, Standard Bank’s bagged the two insurance firms in the acquisition deal last year.

With both Heritage Insurance and CfC Life serving two different insurance segments — general insurance and life insurance respectively—complexities of whether to merge the firms into one or retaining their individual corporate identities pave the way.

But with the tempo with which Standard Bank has gone about rebranding all units in the institution’s stable, all eyes remain focused on the future of both Heritage and CfC Life.

Lower profits
Highlighting the challenges of running one of Kenya’s largest financial supermarkets, CfC Stanbic Holdings reported a two per cent decline in its pre-tax profit for 2008, results of the firm’s first year of operations as a merged entity.

The results covered the five months of CfC Bank and seven months of the CfC Stanbic Holdings operations.

The holdings company posted Sh1.32 billion during 2008 compared to Sh1.35 billion it reported in the previous year.

What remains to be seen is how CfC Stanbic Holdings will navigate through depressed stock markets, undercutting in the insurance industry and slowing bank earnings to contribute towards Standard Bank’s bottom line.