Nairobi Stockbrokers Take a Bath

Last week saw the release of financial results of SBG Securities (formerly CFC Stanbic Financial Services/CSFS). They are the first stockbroker (they are actually licensed as an Investment Bank) to release their 2016 results and this was done along with the release of the results of Stanbic Bank and their common parent – Stanbic Holdings.

At SBG Securities, revenue dropped from Kshs 599 to Kshs 294 million. This was mainly due to stockbrokerage commissions which reduced from Kshs 399 to Kshs 223 million. Expenses were largely unchanged except for salaries that went down from Kshs 183 to 142 million.

SBG’s pre-tax profit for the year was Kshs 3 million, which was substantially down from Kshs 277 million in 2015. Their balance sheet also reduced down from Kshs 1 billion to 648 million. SBG is the number 3 stockbroker in Kenya with 13.8% share, and in
2015, SBG was second in brokerage commission behind Kestrel Capital.

In a notice sent to clients, they reported that turnover at the Nairobi Securities Exchange for the year was Kshs 294 billion compared to Kshs 419 billion in 2015. Also, that market weakness is expected to continue in 2017. But they added:

A new year always starts on a high with each of us drafting our investment/ financial resolutions. As the year progresses, so do our plans and at times they don’t necessarily materialize. 2017 can be the year that you fulfill your investment resolutions by investing in shares listed on the Nairobi Securities Exchange. Whilst the market has hit an 8-year low, we believe this is the time to invest.

Leave a Reply

Your email address will not be published. Required fields are marked *