Stanbic owned investment bank SBG Securities posted a 71.3% drop in net profit in the Financial Year ended December 2020 attributed to lower advisory fees and brokerage commissions.
SBG Securities reported a net profit of Sh34.98m in the period, down from Sh121.85m in 2019. Advisory and consultancy fees, earned when the firm handles corporate deals, fell by Sh83.1m to Sh11.2m in the period, while brokerage commissions were down by Sh63.7m to Sh189m.
This saw total income shrink by Sh155.5m to Sh259.6m during the year. Brokerage commission fell at a time when the equities and bonds markets at the NSE returned mixed performances in 2020, in terms of traded turnover.
Equity turnover at the bourse fell by 3.34% to Sh148b last year from Sh153b in 2019, while bonds turnover rose by 6.08% from Sh651b to Sh691b.
SBG is the first investment bank or stockbroker to release its full year results. The firm responded to the falling income last year by cutting costs, which came down by Sh26.3m to Sh210.8m from. The biggest fall was in employee expenses, which fell by Sh23.7m to Sh70m.