Stanbic IBTC links custody services to economic development

Stanbic IBTC Nominees Limited, the custody subsidiary of Stanbic IBTC Bank PLC, recently organized a forum to facilitate the building of a more robust market for custody services in Nigeria to support economic growth. The move is also expected to deepen development of the local capital market and enhance investor appetite for market securities in the country.

A custodian is a financial institution that holds clients’ securities for safe keeping in order to minimize the risk of their theft or loss. Among such clients’ assets include securities such as share certificates, bonds, stocks and treasury bills.

Custody services are available to a wide portfolio of clients, including unit trust schemes, pension funds, corporate clients, high networth individuals, financial institutions, foreign, local and individual investors, insurance funds, fund managers, brokers, and dealers.

The session, which held in Lagos on Wednesday, December 7, 2016, had in attendance local investors, fund managers, capital market players, regulators, policymakers, bankers and other stakeholders from the private and public sectors.

Deputy Chief Executive, Stanbic IBTC Bank, Dr. Demola Sogunle, said the aim of the session was to examine contemporary issues in custody services and also to highlight the role of custodianship as a critical component in the capital market value chain. However, the level of awareness on how to harness the benefits of custodianship remains low in Nigeria.

“The need for excellent custody services in Nigeria remains strong. This is particularly driven by the impetus in cross-border investment activities, which we are well-positioned to provide. As the leading non-pension custodial firm in Nigeria, Stanbic IBTC provides a steady guide for clients in having the confidence that their assets under the custody of Stanbic IBTC are well-protected,” Sogunle stated.

He remarked that aligning Nigeria with the rest of the world in money market and fixed income securities was a major factor that led to the appointment of custodians by the Central Bank of Nigeria, adding that the adoption of international best practices will enhance transparency in money market operations in the country and cause an attendant lift in investors’ confidence, which will in turn enhance growth of the financial services industry. “Stanbic IBTC will continue to help financial services in Nigeria become even more sophisticated and robust to attract further investments into the country,” he added.

Executive Director, Capital Markets, Nigerian Stock Exchange, Mr. HarunaJalo-Waziri, who commended Stanbic IBTC for organizing the event, said it needs to be emphasized that the capital market is an enabler of wealth creation, which is vital for sustainable economic growth. He highlighted several initiatives introduced by the Exchange to develop and deepen the Nigerian capital market.

Chief Executive, Stanbic IBTC Nominees Limited, Mr. Akeem Oyewale, said the imperative of placing assets under custodianship cannot be over-emphasized. It is in recognition of the vital role of custodians in protecting clients’ assets that regulators such as the Central Bank of Nigeria (CBN) have regulations that ensures that non-proprietary assets of banks are kept with duly licensed custodians, whilst the National Pension Commission (PenCom) also ensures that pension assets are kept with licensed Pension Fund Custodians (PFCs) in line with the Pension Reforms Act.

The insurance industry regulator has also directed insurance assets to be kept with custodians. All these efforts are designed to protect investors’ funds and boost confidence in the system.

Oyewale said advances in technology have enabled custodians to expand product solutions well beyond their traditional roles of settlement and safekeeping to reporting on and monitoring fund investment portfolios, which is consistent with increasing demands on corporate governance, as well as the increased accountability expected of fund managers and/or trustees.

Stanbic IBTCNominees Limited, he said, will not rest on its oars in delivering value to customers as well as prospects. The company, which holds custodial assets on behalf of clients of Stanbic IBTC Bank, will continue to leverage the expertise, technology and experience of the Standard Bank Group, to which Stanbic IBTC belongs, to deliver sustainable shareholder value to its clientele. Standard Bank is itself the largest banking group and sub-custodian in the African continent, with assets under custody in excess of $300 billion.

Through its banking subsidiaries, Standard Bank currently provides custody services in South Africa, Nigeria, Kenya, Ghana, Namibia, Botswana, Swaziland, Zambia, Zimbabwe, Uganda, Mauritius and Malawi. That gives Standard Bank the largest footprint, by far, in the African continent among service providers in sub-custody business.

Stanbic IBTC Nominees Ltd was in 2009 appointed by CBN to act as custodian in money market and fixed income securities for the Nigerian market. This appointment reinforced and extended Stanbic IBTC’s leadership of the Nigerian custody business which it pioneered about 16 years ago.  Recognition of the bank’s strength and expertise in the provision of custody services in Nigeria was reaffirmed recently as it was named the “Best Sub-Custodian” in Nigeria for 2016 by Global Finance magazine, the sixth consecutive time Stanbic IBTC Bank will be adjudged the best sub-custodian in the country.

Stanbic IBTC Nominees Ltd is a fully owned subsidiary of Stanbic IBTC Bank PLC, a member of Standard Bank Group, a full service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. Standard Bank Group is the largest African bank by assets and earnings. It is rooted in Africa with strategic representation in 20 countries on the African continent. Standard Bank has been in operation for over 153 years and is focused on building first-class, on-the-ground financial services organisations in chosen countries in Africa and connecting other selected emerging markets to Africa and to each other, applying sector expertise, particularly in natural resources, globally.