I&M Branch in Nyeri. FILE PHOTO | NMG I&M Group #ticker:I&M is broadening its wealth management services to include local and foreign investment products in a strategy that seeks to grow the lender’s non-interest income.
The move is part of a growing trend among banks to offer companies and high-net-worth clients more services beyond the traditional savings, credit and cash transfers.
The investment services will be offered through the Nairobi Securities Exchange-listed firm’s fully-owned subsidiary I&M Capital which holds a fund management licence.
I&M said at an investor briefing yesterday that it plans to launch a Kenya Shilling money market fund on October 1.
Money market funds typically invest in short-term interest-bearing instruments such as bank deposits and treasury bills.
The company is also set to introduce offshore investments which will give clients access to exchange traded funds (ETFs), indices and shares in major stock exchanges.
ETFs and indices are securities that are based on a basket of stocks or other assets.
The investments, which give customers opportunities and diversification away from the Kenyan market, will be offered in partnership with Bank One.
I&M has a 50 percent stake in Bank One which is based in Mauritius’ Port Louis, a regional financial centre.
The institution also plans to introduce leveraged products which enable investors to increase the size of their portfolios using borrowed funds. Investors will borrow in shillings or US dollars.
The planned services add to recent ones launched in the past few weeks. I&M started trading of Kenya and other sovereign bonds in July.The wealth management services are expected to increase non-interest income which mainly comprise fees and commissions on transactions.I&M Group’s non-interest income rose four percent to Sh8.6 billion in the year ended December when net interest income increased one percent to Sh15.6 billion.The company joins other established players in the wealth management business including Standard Chartered Bank Kenya and Citibank. Most of the lenders offering investment services have historically been strong in corporate banking and serving wealthy individual clients.