Acquisition eats into Kingdom’s earnings

Kingdom Securities Ltd on Thursday became one of the first stockbrokers to release its financial results for the year ending December 31.

However, the firm owned by the Co-operative Bank of Kenya reflected only six months of trading and Sh19.6 million loss following cash injection into the former stockbroker Bob Mathews Brokers.

The losses rose from the Sh7.4 million of 2008.

Regulator Capital Markets Authority (CMA) requires market intermediaries to publish results within three months after end year.

The deadline lapses in a fortnight.

Total revenues for the firm, which is 60 per cent owned by the bank, improved 95 per cent underlining the threat posed by well-capitalised banks to stand-alone brokers.

Co-operative Bank is capitalised to the tune of Sh16.2 billion.

Turnover scaled up from Sh12.9 million to Sh25.4 million.

“Our costs also appreciated from Sh20.3 million to Sh45 million stemming from exceptional establishment costs aimed at operationalising the business and improving the quality of our books,” CEO Geoffrey Odundo told the media during the unveiling of the Kingdom banking hall at Co-operative Building in Nairobi.

Kingdom Securities is employing the full network of the parent bank to capture the market.

This includes 79 branches, which are set for expansion by 10, 124 co-operative societies and 50 independent selling agents.

Mr Odundo said they would focus on reaching the common investor: “We want to provide access to wananchi who have gone through difficult experience through loss of investments.”

He said the broker would also use the 5,000 savings and co-operative societies (Saccos) and 400 front office services and activities (Fosas) to reach its target.

New products

The MD said the broker would in future diversify from stockbrokerage to new products targeting specific market segments.