Stanbic Bank Kenya has emerged as a big winner in the recent acquisition of an additional 14.97 per cent stake in the East African Breweries (EABL) by British multinational Diageo.

The chief executive for Stanbic Bank Kenya and South Sudan Joshua Oigara reported that it was one of the single largest transactions in Kenya’s capital market history.

He mentioned that the bank, through its wholly-owned subsidiary SBG Securities, had brought in a significant amount of fees and revenue, adding that the bank had raked in close to Sh1 billion from the transaction.

"That was one of the single largest transactions done in Kenya's capital market history," Oigara said, highlighting the significance of the deal.

"That brought in a lot of fees and revenue. The bank generated almost Sh1 billion from this transaction."

Read More

  1. Changamka festival kicks off with Salim Mvurya’s call to support Kenya’s local industries
  2. Stanbic Bank and Mastercard unveil two exclusive credit cards for affluent clients
  3. EABL exceeds diversity targets with its Sh5.9 billion for the underrepresented

Stanbic Bank and its investment banking arm SBG Securities played a pivotal role in facilitating the deal.

Stanbic acted as the paying bank, while SBG served as the sponsoring broker and lead acceptance agent. The successful execution of these roles translated into substantial financial gains for both entities.

Diageo's acquisition of 118.394 million shares at Sh192 per share, valued at Sh22.7 billion, propelled its ownership stake in EABL from 50.03 per cent to 65 per cent.

This transaction also propelled SBG Securities to the top of the leaderboard, capturing a dominant 40.6 per cent market share in the Kenyan brokerage scene by the close of 2023.

The impact on SBG's financial performance was nothing short of transformative. The company transformed from a net loss position of Sh1.87 million in 2022 to a remarkable Sh149.72 million net profit in 2023.

Dennis Musau, Stanbic Bank Kenya's chief financial and value officer disclosed that a big part of this is because of this one big transaction that was completed in 2023.

The positive ripple effects extended beyond SBG. Stanbic Holdings' net profit for 2023 jumped by 34 per cent to Sh12.2 billion, driven in part by SBG's performance. Stanbic Bank Kenya's own net earnings also witnessed a healthy 30 per cent growth, reaching Sh11.5 billion.

Stanbic Bancassurance Intermediary further bolstered the group's performance with a 93 per cent surge in net profit to Sh214 million.

Stanbic Bank emerges as the frontrunner in releasing its 2023 full-year results, setting the pace for other lenders expected to follow suit before the month's end.

This news comes amidst a backdrop of a 7.3 per cent dip in the Kenyan banking sector's pre-tax profits for 2023, according to Central Bank of Kenya data.

Stanbic's success story stands out in this context, showcasing the lucrative opportunities presented by strategic involvement in major market transactions.