In a bid to provide customers with a more personal and flexible banking solutions, Kenya’s Equatorial Commercial Bank recently rebranded to become Spire Bank of Kenya.
This is after Mwalimu Teachers Sacco acquired a 75% stake in the lender and went ahead to inject an additional of KSh1 billion three months ago.
READ; Kenya’s Equatorial Bank rebrands to Spire Bank, eyes Insurance Business
We had a chat with the Bank’s Managing Director to give us a glimpse on the Bank’s focus and to get his views on Kenya’s Banking sector.
Why did you decide to Rebrand?
“The launch of Spire Bank of Kenya represented our ongoing commitment to providing a locally relevant, responsive and flexible service to the customers. Whether they are small local business or retail customers.”
How’s the response from your stakeholders?
“So far the feedback from all our stakeholders has been very positive.We are very optimistic for a successful result”
What’s the strategic focus of the Bank in the next five years now that you have the blessings of Africa’s largest Cooperative society?
“We now have a bigger footprint with a focus to move from a tier three bank to tier two in the next five years, Mwalimu Sacco brings in the financial strength that ensures that we are in a strong position to continue expanding our business throughout 2016 and beyond, creating wealth for our customers and employment opportunities across Kenya”
As much as they are willing to fund these businesses, Gitonga says they observed that among the issues affecting the startups include performance risk issues, where these businesses at times do not deliver to the specifications of their contracts and payments become an issue, the bank seeks to do capacity building on them so that they can be the best.
“Our experience with some of clients who run small businesses has been very interesting, their success story has reignited the idea of bank start-ups” says Mr Gitonga.
On the rising Non Performing Loans in Kenya’s Banking Sector and the high cost of credit.
Mr Gitonga argues that the real issue with cost of credit comes from the escalating Non Performing Loans.
“If we all paid our loans, I’m sure interest rates that have been spoken about for so long would go down, Integrity is such a big issue in the country today, that has to be looked at,” he added.
According to the CEO, loan defaults in the bank aren’t related to high interest rates and one of the measures the bank has taken to avoid huge NPLs is to cap the maximum amount that an entity can borrow at Ksh 700 Million.
“Our focus is on digital banking as we have already established very strong IT systems, perhaps the best in the country and we are very happy with a computer based relationship.”
He agrees that keeping a lighter branch platform makes a lot of sense economically but some branch presence in all of the counties would be part of the plan as they have enough access for folks who still like the branch relationship. But that might just be one or two in some counties with a focus on Kisii county.
“However , we want to be “careful” about the number of branches we open because keeping overhead low will help us offer competitive rates.”
Is Kenya’s Banking Sector Over-regulated?
“The sector is not over-regulated, Some banks were put under receivership due to issues related to poor governance.. If the owners of the banks had followed the right rocedures, we couldn’t be talking of small vs the big banks” said Tim Gitonga.
Spire Bank is a Kenyan Bank, regulated by the Central Bank Of Kenya. You can find them on their Website is www.spirebank.co.ke
