Banks in Kenya have changed tact in the race for depositors, shifting their focus from digital platforms and other channels, mostly preferred by the high-end corporate customer, to opening physical banking halls, all in search of the unbanked and not-so-tech-savvy retail customers.
- A glimpse at the Banks’ financial results for the year ended 31st December and the outlook for 2024 reveal plans by many Kenyan banks to open more physical branches.
- Leading the Banks is Co-operative Bank of Kenya which increased its staff costs to KSh 16.69 billion from KSh 14.78 billion on salary increase as well as the hiring of 536 new employees.
- The expanded bank’s workforce has been necessitated by Co-op Bank increasing its branch network by eight to hit 194 at the end of 2023. The lender is planning to open an additional 15 branches by the close of 2024.
I&M Bank also opened 8 new branches, increasing its network to 93 at the end of the 2023 financial year. The Bank, previously focused on the corporate segment, plans to open 12 additional branches as part of its drive to reach out to retail customers. These new outlets are to be set up in Diani, Watamu, and Kilifi as well as downtown Gikomba and Eastleigh areas of Nairobi, Langata, Naivasha, and Tatu City.
I&M Group has set its sights on doubling its physical branches in Kenya to 100 by the end of 2026 in the race to get a share of the lucrative retail banking business. The expansion is part of the Bank’s three-year strategy plan, also known as iMara 3.0, which ends in 2026.
Absa Bank Kenya Plc has also onboarded additional staff, with Yusuf Onari, the lender’s Chief Strategy Officer insisting that while the lender has been automating, it still needs physical branches to have a touch with the customer. At the end of 2023, Absa Bank Kenya staff costs rose to KSh 11.7 billion from KSh 10.4 billion in 2022, due to hiring of additional staff.
In 2024, Absa Bank Kenya joined the race for a share of the Eastleigh booming retail market by opening a new physical outlet at the Business Bay Mall. The lender plans to open another branch in Eldoret’s Rupas Mall as it targets the North Rift’s rich farming community.
According to Absa Kenya MD Abdi Mohammed, the lender is keen to combine branch, digital, and agency banking strategies, front-facing the customer while also avoiding a clog up at the banking halls.
Equity Bank Group, with a niche in the retail segment, has also maintained its expansion of physical branches despite a shift to digital platforms. The lender has opened 10 new branches, including establishing a presence in Nairobi’s Eastleigh area- an attractive commercial hub.
Equity Bank has also set up in Sondu, Mitunguu, Mikinduri, Timau, Kiritiri, Bumala, Mai Mahiu, Masii, and Moi’s Bridge, as it seeks to reach those in informal businesses and retail customers.
Available data shows that more bank customers are shifting away from digital transactions, and instead using ATMs to withdraw cash, partly to avoid tax imposed on mobile money transactions.
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