Investment bank SBG Securities recorded a 150 percent rise in net profit for the six months ended June 2019 on the back of higher revenue from advisory services and cost cutting.
The firm, a subsidiary of Stanbic Holdings #ticker:CFC, reported a net profit of Sh82.1 million for the period compared to Sh32.8 million in the corresponding period last year.
Advisory and consultancy fees rose by Sh80.5 million to Sh94.3 million, making up for a fall of Sh23.2 million in brokerage commissions to Sh111.95 million.
The firm was the sponsoring stockbroker and lead acceptance agent in the successful Sh35.7 billion buyout of listed oil marketer KenolKobil #ticker:KENO by French firm Rubis Energie, though the fees were undisclosed.
SBG cut its total expenses by Sh12.9 million to Sh115.7 million, mainly due to a fall in employee costs, which came down to Sh44.4 million from Sh49.03 million last year, and other expenses that fell by half to Sh12.4 million.
SBG is the first market intermediary to report its half year results.
Stockbrokers are expected to report a mixed bag of results for the period, with those relying heavily on equities trading for commissions likely to suffer due to lower traded volumes in a bearish market.
In the six months to June, traded turnover at the NSE fell by 28 percent, or Sh30.2 billion to Sh78.14 billion compared to similar period in 2018.
Investment banks that have strong foreign trading desks are, however, likely to be spared the worst as foreign investors have accounted for about 73 percent of total turnover.
Intermediaries with strong bonds trading desks are, however, likely to reap the benefit of higher bonds turnover in the period, which was up by 15.3 percent or Sh46.9 billion to Sh352.7 billion in the first half of the year.
This was largely due to investors seeking returns in fixed income assets as equities faltered, and a highly liquid money market. Stockbrokers charge a maximum commission of 1.8 percent on equities trades, and 0.03 percent per bond trade.