Absa Bank relaunches its custody business in Kenya

Absa Bank has officially launched its custody services in Kenya, marking its third market for the business after South Africa and Mauritius.

The move broadens the lender’s product offerings, allowing it to hold and manage financial assets including stocks, bonds, and other securities for institutional clients, corporations, and high-net-worth individuals.

The bank says it aims to cater to a diversified client base, including investment firms, pension funds, and other financial institutions seeking secure asset management solutions.

The re-introduction of Absa Bank's custody business into the Kenyan markets comes as Africa’s pension sector is projected to surge, with assets under management expected to exceed Ksh.200 trillion by 2040, according to the Retirement Benefits Authority (RBA).

The bank sees this growth as a key opportunity to deepen its foothold in the custodial business, which includes trade settlement, asset safekeeping, regulatory compliance, and corporate actions management.

James Agin, Managing Principal, Corporate and Investment Banking, said: “The growth of assets under management as has been mentioned by our regulators this morning—we are looking at Ksh.50 billion per month incremental growth in this business. Now that is an amazing level of growth and very attractive level of growth. And for us, we are saying as an active player in this industry, we are coming back into the market. And since it’s such a big market for us, 10 percent share of that incremental value will be satisfactory.”

Charles Machira, Retirement Benefit Authority CEO, on his part noted: “In today's rapidly evolving financial environment, the role of custodians has also become increasingly vital. Particularly in the space of segregated portfolio, your role extends beyond merely the safeguarding of assets.”

In addition to working with local regulators to align with best practices, the bank will also partner with global custodians to enhance clients' access to international markets.

“For us, what's important is the alternative investment opportunity that comes with this, and we are then going to tap into our complementing solutions, such as our Euroclear's infrastructure licence. This enables us to access offshore security, such as Eurobonds and the commodity space. Which you already know, our pride in this market is the Absa Gold ETF,” added Mr. Agin.