The Central Bank of Kenya (CBK) has warned local lenders against neglecting their obligation to customers amid a flurry of mergers and acquisitions in the banking sector.
Commenting on the recent transition of Barclays Bank Kenya to Absa Bank Kenya after its acquisition by the South African banking group, the regulator said yesterday banks are seen as not being sensitive to the needs of their customers through the high cost of credit, opaqueness and poor customer service.
“The time is opportune for the Kenyan banking sector to work for and with Kenyans to realise their aspirations. There are, however, long-standing challenges bedevilling the banking sector that could threaten this favourable outlook,” said CBK in a statement.
While announcing the final transition to Absa Bank Kenya last week, the lender cautioned its customers and shareholders to be wary of fraudsters who might be out to profit from the name change.
“All contractual relationships and obligations that the bank has with its customers, partners, and other stakeholders are not affected by this change of name,” said the Absa Kenya board in a notice in the dailies.
Welcoming the move yesterday, CBK urged lenders to strictly observe ethical practices. "It is critical that Absa Kenya rises to these challenges with a sense of responsibility that encompasses its 104 years heritage,” said the regulator.
“Only by being more customer-centric, fair and responsible in pricing, transparent and ethical will Absa Kenya breathe life into its transformation." The regulator said many lenders were guilty of flouting the Banking Sector Charter set up in 2019 meant “to move banks towards customer centricity, risk-based credit pricing, transparency and doing the right thing".
Kenya is no stranger to rebrands, having recently witnessed the change of names in several banks in the last five years, where K-Rep Bank rebranded to Sidian Bank in 2016 after Centum Investment Company completed the acquisition of a majority stake in the bank.
In the same year, Equatorial Commercial Bank also rebranded to Spire Bank, while Oriental Bank changed its name to M-Orient Bank.