Barclays Bank of Kenya has completed over 80% of the projects necessary to rebrand into Absa. The bank, operating in 12 markets and about 1,000 branches is looking to finish the transition by June 2020.
By September 2019, the transition costs had hit KSh 910m.
“We are almost at the tail end of the process. We wanted to be sure and confident that by January 2020, there is not much left for the transition. That is where we are today,” said Moses Muthui, Absa’s Country Director for Strategy said in an interview with KTN.
A major part of the strategic choice involved technology projects such as bringing services once hosted abroad to Kenya. Previously, Barclays Plc hosted close to 250 services, which the bank now houses in Kenya. The bank is now changing the appearance of its branches, recently unveiling the First Absa Branded Branch.
“We have been very transparent with the process because we wanted our customers to get confident with our brand, the products, and services and the future strategy. Besides, we wanted our investors to be confident that we have a growing business and a solid strategy and that the stock continues to provide upside for the medium and long term. These were some of our considerations beyond the technological and operation change,” he continued.
Kenya’s Changing Banking Sector
Absa’s transition happens in the backdrop of other changes in the Kenyan banking space. Last year saw mergers between KCB and NBK as well as CBA and NIC bank. Moreover, industry players are calling for regulation to foster similar marriages such as higher capital requirements, which will reduce the number of banks and increase competition.
Local banks are eyeing new markets, where Absa has premises in London and is looking to secure a license in the US. Similarly, Equity Group is acquiring a 66.5% stake in DRC’s Banque Commerciale Du Congo. The bank group targets to establish a presence in 15 countries by 2026.
Other changes in Kenya’s banking space include the repeal of interest rate cap, which saw bank stocks rally up and shone hope for credit access upon Kenya’s SMEs.