Assets under StanChart wealth management unit hit Sh129bn

A StanChart bank branch in Nairobi. PHOTO | NMG

By CHARLES MWANIKI
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Summary

• The lender said Thursday that the unit which targets affluent Kenyans and the middle class is now managing Sh129 billion assets, up from Sh68 billion in 2019, and has recorded a compounded annual growth rate of 50 per cent since 2017.
• The sharp growth points to an increasing number of wealthy Kenyans who are turning to professional fund managers to look after their money, banking on professional expertise to cut risk and identify the best investment options.

Standard Chartered Kenya’s wealth management unit recorded a 90 percent increase in assets under its watch in 2020, benefiting from digitisation of services and products that include mobile bonds trading.

The lender said Thursday that the unit which targets affluent Kenyans and the middle class is now managing Sh129 billion assets, up from Sh68 billion in 2019, and has recorded a compounded annual growth rate of 50 per cent since 2017.

The sharp growth points to an increasing number of wealthy Kenyans who are turning to professional fund managers to look after their money, banking on professional expertise to cut risk and identify the best investment options.

“...our wealth management business achieved a milestone of assets under management (AuM) of Sh129 billion in 2020, reflecting a 90 per cent growth compared to 2019,” said StanChart in a briefing on its 2020 financial results Thursday.

Its growth mirrors that of the assets being managed by collective investment schemes (unit trusts), which grew from Sh56 billion in September 2017 to Sh98 billion in September 2020 as per latest data from the Capital markets Authority (CMA).

The lender attributed the rise in AuM to increased adoption of digital services in the unit, provision of lending services to businesses and increased uptake of bancassurance services.

Clients signed up to the service are allowed to borrow business loans using their investments as collateral.

The wealth management business contributes a significant part of its non-interest income, which last year fell by 10.2 percent to Sh8.29 billion.

Stanchart attributed this decline to reduced volume of transactions due to the Covid-19 pandemic, as well as the removal by the Central Bank of Kenya of fees charged on transfers between banks accounts and mobile wallets.

Its net profit for the year fell by 33.9 per cent to Sh5.44 billion from Sh8.24 billion in 2019.