This move gives institutional clients—both domestic and foreign—more freedom and a wider range of investment alternatives by enabling them to borrow and lend not only stocks but also fixed-income assets like Treasury Bills and Federal Government Bonds.
This noteworthy advancement represents a fresh turning point in the Nigerian capital market, offering customers better chances to generate money and more market liquidity.
“In 2023 alone, we facilitated the lending of assets worth N150 million,” Majiyagbe noted. “This reflects the growing trust and demand for our securities lending services and underscores our role in enhancing market liquidity and efficiency,” said Babatunde Majiyagbe, Head, Investor Services at Stanbic IBTC Bank Limited.
Majiyagbe who highlighted the importance of extended securities lending said, “Expanding our securities lending services to include fixed income securities provides our clients with broader opportunities to generate income and enhances overall market liquidity.
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“This expansion not only broadens the scope of our offerings but also provides our clients with a wider range of assets to optimise their investment strategies and achieve their business objectives, enhancing the overall liquidity and efficiency of the Nigerian capital market. This move underscores our commitment to driving innovation and growth in the Nigerian capital market.”
The Nigerian market has had access to securities lending for more than ten years, during which time Stanbic IBTC has been the only active securities lending agency. It is anticipated that the loan portfolio’s incorporation of fixed-income assets would have a revolutionary influence on the market by boosting price discovery mechanisms’ effectiveness, augmenting overall market liquidity, and facilitating efficient market-making.
Securities lending promotes a more active and liquid market environment by enabling market players to take and cover short positions as part of their trading and investing strategies, or for hedging purposes. It is anticipated that this move would draw in more investors and propel the Nigerian capital market’s further expansion.
Securities lending plays a critical role in effective market-making and enhancing the efficiency of price-discovery mechanisms.
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Majiyagbe explained, “Securities lending facilitates continuous trading and liquidity, which are essential for a vibrant market. Our expansion into fixed-income securities will attract more investors and foster a more robust and resilient capital market.”
In 2015, the bank facilitated the first securities lending transaction in Nigeria, and since then, it has remained the most active participant in this space. The recent extension of services to include fixed-income securities is part of Stanbic IBTC’s broader strategy to provide comprehensive financial solutions and support the growth of Nigeria’s capital market.
“We are excited about the future and remain committed to driving innovation and excellence in the financial services industry,” Majiyagbe concluded. “Our goal is to continuously enhance our offerings to meet the evolving needs of our clients and contribute to the overall development of the Nigerian capital market.”
The inclusion of fixed-income securities in Stanbic IBTC’s lending portfolio represents a significant advancement for the Nigerian capital market. It opens up new avenues for income generation and liquidity management for investors, positioning Stanbic IBTC as a key player in the evolution of the market.
