July 27th 2017

Business / News

StanChart Bank closes four branches as crisis in financial institutions worsens

The Standard Chartered branches that will be affected include, Bungoma, Kisii, Kitengela and Warwick (Nairobi). The bank says the move is pegged on the digital transition.

By Trizza Kimanitkimani@kenyafreepress.comWednesday, 12 Jul 2017 08:16 EAT

Standard Chartered Bank (Kenya) CEO Lamin Manjang' addressing media in a past event.

Standard Chartered Bank Kenya’s announcement on Monday that it was closing four of its branches by the end of next month paints a grim picture  of  Kenyan financial institutions with fears of economic decline in the country.

Barclay's Bank last week announced the closure of seven of its branches across the country, effective October, in a move to save costs. In an email to staff on Monday, Managing Director Jeremy Awori however noted employees will not be affected.

“This is a consolidation move aimed at aligning our business to the current environment. No staff will be sacked,” he said.

The Barclays branches that are earmarked for closure are five in Nairobi, one in Meru and another in Wundanyi. The Haile Selassie branch will be consolidated with the one on Harambee Avenue, Moi Avenue with Queensway House, Waiyaki Way with Westlands, Kawangware with Lavington and Rahimtullah with Bunyala.

The branch at Nakumatt Meru will move to another branch in the town and the one in Wundanyi to Voi. Mr Awori said workers will be redeployed based on available opportunities and skills.

The Standard Chartered branches that will be affected include, Bungoma, Kisii, Kitengela and Warwick (Nairobi). The bank says the move is pegged on the digital transition.

CEO Lamin Manjang' however assured affected clients that the closure will not interrupt access to their accounts. The closures are the results of a restructing plan that has become necessary with the current market conditions, he added.

"The accounts will be moved to the nearest branches. The affected staff will also be deployed to other branches and other roles. We are continuously undertaking a branch rationalization program in line with our digital-by-design strategy," Mr Manjang' said.

Under the investment package, the lender has already introduced in Kenya a mobile banking app, an iPad-based digital sales and  service tool, a new banking platform and fingerprint log in technology.

The closure of four branches will leave Standard Chartered Bank with only 37 branches in the country, 21 of them in Nairobi.

The crisis in banks has been witnessed since the operationalization of the Banking (Amendment) Act, 2016 that capped loan interests at 4 per cent above Central Bank Rate.

The ongoing digital wave in the banking sector is viewed as a cost-cutting strategy to cushion banks from reduced profit shocks.

Other banks that have closed branches in recent times include Bank of Africa that not only shut down 12 branches but also laid off hundreds of its staff.

.





Stay Connected