Standard Securities recruiting in SA, Credit Suisse becomes competitor

From partners to competitors: this week the joint brokerage business between Credit Suisse and Standard Bank was formally dissolved and the two banks promptly announced new hires and big ambitions for the future.

The JV, started in 2006 , grew its market share from less than 3% to 9% until the decision to part company last year so that each group could control its own business. Standard Bank acquired all of Credit Suisse Standard Securities and renamed it SBG Securities.

The division of Africa's largest bank has just announced its plans to hire up to 15 analysts this year, ten in South Africa and the rest in other countries like Kenya and Nigeria, as well as two proprietary traders in London. By the end of 2011 the headcount at Standard's securities unit is expected to reach 160 from 118 in 2010. "We want comprehensive coverage," Marc Ter Mors, head of research at SBG Securities, said. The number of stocks covered will almost double to 100 .

Standard is ready to exploit its strong presence and links in other African countries to attract investors interested in new markets. It also intends to use its relationship with Industrial & Commercial Bank of China, which owns 20% of the bank, to capture trade and investment flows and benefit from project-financing transactions and good IPO pipeline.

That is why "it made sense for us to have our own SA securities business to complement the securities businesses owned elsewhere in the emerging market time zone", says Ian Carton, global head of cash equities at SBG Securities.

"The depth of our local knowledge, particularly in sub-Saharan Africa, is the big differentiator," says Carton. " We intend to be a strong top-ten competitor in South Africa and we our differentiating characteristic as an emerging market brokerage house is our emerging market presence and our presence in Africa particularly."

SB last year bought the number one stockbroker in Nigeria and a leading brokerage firm in Kenya, as well as an investment bank in Turkey. The strategy is to "bring Africa to the world and the world to Africa."

While Standard rolls out is ambitious strategy, its former partner does not intend to lie idle but is aiming for "significant growth".

Credit Suisse has been setting up its own business and wants to offer a wide range of products including equities, research and investment. It too is planning to use its South African unit as a springboard for expansion in the rest of the African continent.

"Credit Suisse will offer an integrated offering across the whole suite of equities products under the CS Securities Johannesburg umbrella," Guy Ridgen, co-head of equities in EMEA, says. "Our new, wholly owned independent business is consistent with our other global equities businesses, and will enable us to offer domestic and international clients the benefits of the integrated bank."

Credit Suisse's first high-profile promotion is that of Derek Hompes, a former JP Morgan employee, as head of equities in South Africa.