KCB Bank Rwanda has unveiled its Custody Services to boost capital markets in the country.
The initiative, according to experts, will play a critical role in the development of capital markets and boost investor appetite for market securities in the country.
As a custodian, the bank will manage the financial assets on behalf of investors, mainly foreign and institutional investors, hence exposing the country to international markets as well as help attract foreign investments.
Under this arrangement, the bank will also provide a range of securities services, including safekeeping and settlement, reporting, corporate actions, dividends collection and distribution, Maurice Toroitich, the KCB Bank Rwanda managing director, told The New Times.
“The service of a custodian is a critical component in the capital market value chain,” Toroitich noted.
It also profiles the capital markets in Rwanda as not being deficient in terms of professional service providers that local or regional investors are looking for, he added. The subsidiary of KCB Bank Group first set up its Custody Services in Rwanda in March 2011 as part of the efforts to support investors in the then newly listed Bralirwa Ltd, the country’s main producer and seller of beer and soft drinks.
The move, according to experts, will also consolidate KCB Bank as the country’s biggest custodian, given its ties with global custodians.
Roabert Mathu, the Executive Director of Capital Markets Authority, said the move by the bank is a great step towards building a more solidified market and financial sector in general.
“The KCB initiative to invest in custody services will pay off because there is a deliberate effort to make Rwanda a financial services hub in the region and this is a responsibility of all players,” he said.
He was speaking during the official launch of KCB Bank Rwanda Custody Services in Kigali yesterday.
Mathu added that with a strong presence in the East African region, KCB has the advantage of leveraging its foreign presence to attract institutional investors into Rwanda more than any other bank.
Mathu urged market players to embrace sensitization campaigns to create more awareness on the role of capital markets in developing the economy.
In addition, most of the business in the Custody Services sector comes from foreign institutional investors (FIIs) who have business relations with the international offices of KCB.
“To have a local custodian that has ties with global custodians is great,” said Andrew Owiny, the Chief Executive Officer MBEA Brokerage Services Ltd.
Owiny added that the drivers of the capital markets in Uganda and Rwanda are international clients.
“And as the first custodian in the market, the bank has been instrumental in enabling the entry of international investors into the Rwanda Capital Markets from USA, UK, Mauritius, South Africa, Singapore, Sweden, Cyprus and the East African region,” he added.
As a result, the portfolio under management rose from zero in March 2011 to Rwf125 billion in March 2016.
Celestin Rwabukumba, the chief executive of Rwanda Stock Exchange (RSE), said, KCB is leveraging their regional custodian business and experience to bring more and skills and innovation into the market.
“It’s moving to the rhythm of the market and, as the financial services in Rwanda continue to be deepened, we will see the custodian business taking off, Rwabukumba said.