With the capping of interest rates it is only a matter of time before banks diversify to new income generating businesses so as to remain profitable. The banks will have to cut their reliance on interest income. It is for this reason that Barclays Bank went ahead and opened a stock brokerage subsidiary. The launch of Barclays Financial Services Limited (BFSL) took place last week on Friday. Through Barclays Financial Services Barclays Bank looks to diversify its revenue lines.
“A while ago we had talked about our agenda of diversifying business and investing in new revenue streams and one area we talked about was looking at the investment banking arm and brokerage business.”
-Barclays Bank of Kenya MD Jeremy Awori
Barclays Financial Services Limited will offer cash equity trading services, fixed income and bond trading and derivatives. The new brokerage is also looking at launching Exchange Traded Funds (ETF). Exchange Traded Funds is a marketable security that tracks an index, a commodity or bonds. The move into ETFs is expected to make Kenya even more competitive investment hub. As we speak Kenya is the third largest stock-market hub in sub-Saharan Africa after the South African JSE and Nigeria’s SEC.
BFSL is also poised to launch Barclays Live, a key research portal, to provide indices, data and analytical tools, and client sector-based research across agriculture, business services, commodities, financial institutions, global development organisations, healthcare manufacturing, transport and logistics.
For the curious, Barclays Financial Services Limited is an investment bank licensed by the Capital Markets Authority and was admitted as a trading participant of the NSE in 2015. This authorizes it to undertake brokerage activities in the Nairobi Securities Exchange (NSE).
Apart from Kenya, Barclays Financial Services Limited will also be active in nine other African countries namely Tanzania, Uganda, Zambia, Mozambique, South Africa, Seychelles, Mauritius, Ghana and Botswana.