KCB unveils plan to close three branches

The Kenya Commercial Bank plans to close three branches by mid next year as it steps up its cost-cutting programme.

The lender, which in April started sending home hundreds of workers to save at least Sh2 billion in staff costs annually, now wants to shut the outlets in a move that could result in job cuts.

“We wish to notify the public of the intended closure of KCB Kericho East branch, KCB ICD Kibarani branch, and KCB Moi International Airport branch on June 30, 2018,” said the bank.

In an advert in the dailies, KCB said relationship management, including ATM and cheque book collection services, would now be managed by nearby branches.

Those who get services from the Kericho East branch will now be directed to the Kericho branch while those from ICD Kibarani and Moi International Airport in Mombasa will be served by KCB Changamwe.

“At KCB, we are a one-branch bank, allowing customers to transact and access bank services across the entire KCB network,” said the notice.

In the bank’s latest financial results covering the period up to September 2017, Group Chief Executive Joshua Oigara said branches now account for 14 per cent of transactions, down from 27 per cent at the same time last year.

That means 86 per cent of transactions are now done outside branches, with 57 per cent of customers opting to transact on their mobile phones.

ATMs are popular with about 10 per cent of KCB customers while agency banking attracts 14 per cent of clients.

Agency banking

Customers applied and received loans worth Sh20.3 billion via the mobile platform by September 2017, up from Sh9.1 billion disbursed through the same channel in a similar quarter last year.

In the nine months to September, the bank spent Sh13.8 billion on staff costs, up from Sh12.4 billion in the similar quarter of 2016.

Staff rationalisation

The action by KCB follows the same trend as Barclays Bank of Kenya, which in October merged seven branches to trim costs.

The bank had just announced a staff rationalisation programme that led to the departure of more than 100 employees.

Since the interest rate cap was set last year, many banks have stopped hiring, with others opting to cut staff size to compensate for educed interest income.

Other lenders that have announced staff cuts or branch closures include Bank of Africa, National Bank of Kenya, Sidian Bank, Family Bank, First Community Bank, Standard Chartered Bank, and Ecobank.