Standard Investment Bank: One of Kenya’s Foremost Financial Services Firm

Interview with Job Kihumba, Executive Director at Standard Investment Bank (SIB)

What fields do you cover?

Standard Investment Bank was founded in 1995. We have been active for the last 25 years. SIB was founded to provide trading in listed securities, largely equities and bonds. Over the years, it has steadily changed into an investment bank. We received our investment banking license in 2006. After that, we gradually began to diversify into other products. Today, we have a number of products that are available to the market cutting across the investment banking field, including IPOs which unfortunately we have not had in Kenya in many years. The last IPO in Kenya was the listing of the Nairobi Securities Exchange itself on its own exchange in 2014. SIB was the lead transaction advisor. In the area of IPOs and other types of public offers, SIB has had the biggest share of the market. We also do corporate mergers and acquisitions. The latest was the acquisition of the National Bank of Kenya by Kenya Commercial Bank. We had a big role as transaction advisor and we were also able to give an independent opinion on pricing and other fundamental issues. We have been involved in privatizations for many years. Although, the privatization projects in the last 10 years have not been very successful. We have the only concluded privatization program in Kenya after the Privatization Act of 2005 which came into implementation in 2008. We were involved in the very first transactions. Kenya Wine Agencies was acquired by a South African wine company. Currently, we are involved in four privatization programs. Some have been around for a long time as the government does not always move quickly on these things. We have also been involved in looking for finance for people who are looking for capital to invest in companies outside the public domain which would be in the private placement, private equity, etc. We have a license to do money management that we received late last year. This is now in the public domain. We are fairly well diversified in terms of what we can be able to do for our clients across the board. We consider ourselves a leading investment bank. Interestingly, the very foundation of Standard Investment Bank was based on trading securities that were listed on the Securities Exchange and we have been involved from the beginning to now. We have had the benefit that myself and the founder of the firm, Mr James Wangunyu, have been involved in the Nairobi Securities Exchange and the central repositories at Board levels, etc. I was the first CEO of the Nairobi Securities Exchange and became Vice Chairman much later. Mr Wangunyu was also a Director of the Nairobi Securities Exchange. We have been fairly well involved with the market and benefit from a very close association. We have also been involved with the Capital Markets Authority (CMA). They have been undertaking efforts including improvement of corporate governance in the country for the capital market specifically. They recently launched an accord on corporate governance and followed up with an accord targeted at institutional investors. We have all been involved in this committee and we are at the center of corporate governance and capital market development in the country.

What is your competitive advantage? How do you see the company developing in the next three years?

Currently, we are the most innovative investment bank of the local investment banks in Kenya. We are always very quick to pick up new products. Whenever there is a new product, we expose our staff to a new way of doing things quite quickly. In the next two years, we will have an even bigger market share. We want to consolidate what we do, what we know, and also get into new areas. We have not restricted ourselves to just the Kenyan market. We have had projects in Uganda, Tanzania, Rwanda, Malawi. We see ourselves as cutting across borders.

Are you working on any specific projects?

The capital markets sector in Kenya has had a major challenge in terms of growth. The last ten years have not seen much growth, but it is not for lack of trying. There are fundamental issues that have constrained the growth of capital markets here, especially at the macro level. We have a very innovative regulator. The Kenyan Capital Markets Authority has been recognized as one of the most innovative capital markets globally. New products have been proposed and launched and we have a future as a country. There is a lot going into the country. Even at the global level, Kenya is poised to do quite well. As a country, in 2020 or 2021, we should achieve more than 6% growth on GDP. This is respectable but still lower than what we had expected.

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