Pan-African lender Ecobank will be closing nearly a third of its branches by end of April next year as it seeks to push business through digital channels.
Ecobank said the downscaling is not unique to its Kenyan operations but was happening across the 36 countries it operates in.
They are Chambers, Ongata Rongai, Gikomba, Embakasi, Thika Road Mall (TRM), Meru, Kitale, Busia and Malindi branches. Ecobank will remain with 20 operating branches.
Chief Executive Sam Adjei said: “The decision to close the nine branches was arrived at early this year after we reviewed our business operating model and elected to use a more effective and efficient way of serving our customers.”
Mr Adjei said the bank had informed the affected customers, who will be served using pay-bill services, of the planned closure. Ecobank, which entered the Kenyan market in 2008 following the acquisition of East African Building Society, has recorded mixed performance returning to profitability last year after three years of loss making.
Following the acquisition, the deep-pocketed Togo-based lender targeted the retail market, which was performing well at the time, advising its rapid expansion. It posted profit in the first three years of operation before heavy investment in government securities started to bite, pushing it in the red.
The downscaling is expected to help cut operational costs at a time bank margins have been slashed following capping of interest rates. The process will also result in job losses even as the bank sought to reassure that some staff will be absorbed in other branches and roles.
The bank is in the process of selling its head office, Ecobank Towers, which is in the central business district in a deal expected to ramp up its full-year performance.
Banks have been abandoning the traditional brick and mortar channel of offering services opting to use technology to reach their customers.
Ecobank Kenya was recently upgraded to a regional hub of operations for 18 countries headquartered in Westlands, with the promise of being upgraded to status equalling operations in Nigeria and Ghana. Some of the countries reporting to Kenya include Cameroon, Gabon, Equatorial Guinea, Chad, Central Africa Republic, Congo Brazzaville, the Democratic Republic of Congo, Zambia, Zimbabwe and Mozambique. The cluster also includes Kenyan neighbours Tanzania, Uganda, Burundi, Rwanda and South Sudan.
Author: Gesture Chidhanguro