Ecobank investment arm bucks the trend with over 300 per cent profit jump

An Ecobank branch in Nairobi: The lender’s investment subsidiary earned Sh2.8 million profit in the half year to June. PHOTO | FILE 

By BRIAN NGUGI

Ecobank’s investment arm has reported a 329 per cent growth in net profit to Sh2.8 million for the half year to June 30, bucking the trend where several market intermediaries have reported sharp drops in earnings for the period.

The EBI Investment Corporation Kenya said in public filings that its net profit was boosted by a 43.8 per cent rise in interest income - which is interest and other earnings from the securities that EBI holds - to Sh12.29 million compared to Sh8.54 million in a similar period last year.

The company made a total income of Sh12.29 million compare to Sh8.8 million in the same period last year, a 38.9 per cent growth.

Despite the increase in net profit, EBI Investment said it recorded nil exchange gains in the period compared to Sh304 million a similar period last year.

EBI Investment similarly recorded nil earnings in advisory and consultancy fees.

Its performance contrasted with that of some of its rivals, which have reported declining profits as the long bear run on the Nairobi Securities Exchange (NSE) bites.

Stock brokerage firms Kestrel Capital and Renaissance Capital (Rencap) have recorded a drastic falls in their half-year profit after tax on the back of falling share prices and market turnover on the NSE.

READ: NSE shares tumble hits Kestrel, RenCap’s half-year profits

Both Kestrel and RenCap said last Thursday in public filings that their half-year profits took an acute hit from reduced brokerage commissions and related income arising out of the decline in activity on the NSE.

Kestrel Capital and RenCap said their net profit for the six months to June declined by 96.8 per cent and 85.7 per cent respectively.

EBI Investment is housed under Ecobank Capital, which handles the investment banking operations in all countries where the lender operates.

It was licensed in 2014 as Ecobank joined other lenders in cashing in on investment banking as several banks flexed muscles in a field once dominated by stockbrokers.

Ecobank Capital managing director Moyo Kamgaing had in 2014 said the investment bank was in particular looking for deals in the oil, gas and power sectors.

The NSE has generally been on the decline this year with data showing that the number of trades fell by 31 per cent to 158,790 in the six months to June, from 232,212 the same period last year.

NSE 20 share index is down nearly 15 per cent in the year to date.