Capital Markets Authority grants HF licence for custodial services business

Housing Finance offices at Rehani House, Nairobi. PHOTO: COURTESY.

Nairobi, KENYA: Housing Finance company HFC, the banking subsidiary of HF Group, has received approval by the Capital Markets Authority (CMA) and Central Bank of Kenya (CBK) to provide custodial services to fund managers, brokers, investment banks, corporates, pension schemes and high net worth individuals.

In a press release on Tuesday, HFC’s Managing Director, Sam Waweru said the license enhances the bank’s full-service banking strategy and provides customers with a one-stop shop for their financial needs.

“This license is key to achieving that goal. We also expect to significantly improve our financial position in the medium term by locking in non-funded income revenue streams as well as boosting foreign exchange flows for the business,” Mr. Waweru said.

The new licence enables the lender to hold cash and other property on behalf of pension schemes, fund managers, stockbrokers, investment banks, corporates and high-net worth individuals for a fee.

Mr. Waweru pointed those custodial services as a business segment had witnessed strong growth over the last ten years due to incremental local and foreign investor activity, especially within the equities and government debt segments.

“The value of assets under custody have appreciated over time because of a conducive interest rate environment and increased investor confidence. “He said.

“The Capital Markets Authority has also been committed to driving this growth through active engagement with industry stakeholders, including custodians, when introducing new products that are in line with global standards,” he added.

The license now positions HFC into a role of attracting domestic and foreign investments into the local financial markets through providing asset safekeeping and other related custody services to institutional investors.

The subsidiary will now offer core custody services, cash management services, escrow custody services, trustee services, and bond trading.