By James Anyanzwa
CfC Stanbic Bank expects its newly opened branch in southern Sudan to start making profit earlier than anticipated owing to numerous opportunities in the region.
Although it normally takes between 12-18 months for a new branch to break-even, the bank is betting on its trade finance business to shore up its earnings much faster.
The bank’s optimism is in stark contrast to the flare up in conflict and dwindling foreign exchange receipts in the region.
For example, Jetlink airline suspended its operations due to its inability to access $2 million (Sh170 Million) owing to scarcity of foreign currency in Southern Sudan.
But the bank considers the volatile situation to be short-term.
“There has been a disruption to the flow of foreign exchange receipts in the region as result of a flare up of conflict, but we see that as a temporary issue,” Managing Director Greg Brackenridge told reporters, adding that the Bank would be opening additional three to four branches in Southern Sudan next year.
Boost operations
This is after a successful rights issue in which CfC Stanbic Holdings raised Sh4 billion by offloading an additional 121.7 million new shares to the existing shareholders at an offer price of Sh33 per share. The new shares started trading on the Nairobi Securities Exchange on November 8. The proceeds of the cash-call would be used to boost the bank’s operations in Kenya and Southern Sudan.
“Our strategy for the Group is to change the funding mix to raise the proportion of funding that comes from customer, deposits in order to lower the cost of funding. We’re delighted by this vote of confidence by our Shareholders,” said Brackenridge.
