Why Custody is The Missing Piece in Your Wealth Creation Portfolio

As global financial markets become more volatile and unpredictable, more people are seeking ways to grow their wealth while minimising risk. From seasoned entrepreneurs to an increasingly ambitious middle class, more people are emerging with surplus capital that represents years of sacrifice, ambition, and resilience. These wealth creators have moved beyond accumulation and are more concerned with legacy, sustainability and impact. And with this emerging curiosity, many are seeking structures that can facilitate and enable their accumulated values to maximize growth, ease accessibility, while being insulated against market shocks.

The answer lies in reimagining custody as a springboard for strategic growth, security and long-term wealth creation. Historically, custody has been viewed as a vault for financial instruments. But this is changing as investors are now turning to custody services as drivers of portfolio performance. This is because financial security lies beyond wealth accumulation but also in how effectively that wealth is structured, protected and deployed.

As Absa Bank, our return to the custody business has seen us reimagine this space as an integrated part of the wealth creation value chain, linking it seamlessly with investment banking, asset management, global markets and brokerage services. This enables our clients to access investment opportunities and products both in local markets and regionally where we operate as a market accelerator for stimulation of capital markets and wealth creation.

In just under a year, we have amassed over Kes 70 billion of assets under custody in Kenya alone by the first quarter of 2025, setting an ambitious goal to quadruple this by the end of the year. With Absa custody services now live in Kenya, South Africa, Uganda, Botswana, Ghana and Mauritius, there are plans to roll out similar services in Mozambique this year.

Through in-house collaborations, we have delivered structured products to our customers, and our in-depth knowledge of capital markets is reflective of our passion for delivering transformative, innovative client and wealth creation solutions, creating structures to access these opportunities while investing in Africa’s future.

Custody Business especially presents us with an opportunity to leverage clients’ wealth on the infrastructure we have already built. Our Euroclear license has enabled our clients to access investments in the alternative investment space like Eurobonds (FX), as well as other structured products like REPOs, Swaps while still supporting the only two locally listed Exchange Traded Funds in the local market.

More importantly, we’ve embedded real-time technology across our custody platforms, enabling straight-through processing (STP), automated reconciliations, and secure digital instruction flows. This ensures faster execution, reduced settlement friction, and greater operational control for our clients.

To ensure faster execution, reduced settlement frictions and greater operational control, we have also embedded technology across our custody platform, allowing Straight Through Processing (STP), a self-service portal automated, real-time reconciliations, and seamless digital instructions for our customers.

Clients can tap into market research and can provide actionable insights that support decision-making, even as they explore the emerging opportunities in ESG-linked products to digital custody and regional fund access.

We cannot ignore the relevance of custody in today’s uncertain macroeconomic environment. Factors like regulatory shifts, currency fluctuations and market volatility pose real risks to unmanaged portfolios. At Absa, we mitigate these risks by embedding risk tools, providing actionable risks and cross border FX integration to enable more resilient investment decision-making. This way, custody is not just a vault for your wealth, it is a launchpad for accessing emerging opportunities in ESG, structured notes and digital assets.

Our re-entry into the Custody business has been timely. With the Kenyan government’s move to recognize and enable virtual assets market, the proposed Virtual Assets Policy and Virtual Assets Service Providers Bill create the perfect environment for sector players to proactively build capacity to offer regulated digital custody services in the country. Absa has not been left behind. The group has partnered with technology enablers to position the business rightly to provide virtual custody solutions once the framework is in place

Going forward, Absa Bank looks forward to collaborating with key stakeholders, including regulators such as the Capital Markets Authority, Retirement Benefits Authority, Nairobi Securities Exchange and the Central Depository and Settlement Corporation. We look forward to continuing our fruitful engagements with pension administrators, fund managers, associations, and other institutional investors to proactively provide forward-looking solutions to the ever-evolving investment landscape.

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Timothy Ndemwa, Head, Custody Business, Absa Bank Kenya