Co op Bank to acquire 150,000 CDS accounts

August 19, 2009

, NAIROBI, Kenya, Aug 19 – Close to 150,000 Central Depository and Settlement (CDS) accounts previously held with the troubled Discount Securities will soon be transferred to the Cooperative Bank.

This follows the awarding of custodial services tender advertised by the Capital Markets Authority (CMA) to the bank.

Managing Director Gideon Muriuki told an investor briefing that they would be liaising with the CMA to work out how to take over the accounts which would go a long way in enabling them to grow with their non-funded income streams.

“This means that we will probably be having the largest base of CDS account holders now in the industry because it means that we will take over the entire client base of Discount Securities,” he explained.

The bank carries out the custodial business although it also owns a majority stake in Kingdom Securities.

The brokerage firm was placed under statutory management early this year for six months as it was found to be facing serious corporate governance and liquidity problems.

The broker’s clients have since had their securities in the custody of the Central Depository and Settlement Corporation (CDSC) Limited.

Mr Muriuki spoke when he released the bank’s half year results which indicated that they recorded a 16 percent increase in profit before tax to Sh1.94 billion versus Sh1.67 billion in the same period last year.

The bank, which is ranked fourth biggest in Kenya attributed this performance to several initiatives undertaken to grow its business.

“We have looked at alternative banking channels, we have invested fairly heavily in the cooperative movement in terms of point of sale banking and we are able to expand with the same staff count,” he said.

During the function, Mr Muriuki disclosed that the bank has invited consultants to advice them on how to go about upgrading their core banking system.

He added that plans to enter into a strategic joint venture with the cooperative movement in Southern Sudan were still on course and they were awaiting the green light from that government soon.

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