Bank of Africa will shut 12 retail branches in Kenya as it moves to adopt an Information Technology driven business module,the lender has said,becoming the latest to review its operations in the country.
This is in the wake of a growing digital banking platform in the country which is pushing banks from brick and mortar, and the recent capping of interest rates which has slowed down lending by banks.
BOAK managing director Ronald Marambii yesterday said the move is part of Bank of Africa Group plans “to make Nairobi the Anglophone regional information technology hub for its operations, in a move to enhance its efficiency in customer service”.
The hub will consolidate IT departments from five other countries in the region, which will enable the bank optimize its digital banking such as the B-Mobile, internet banking , ATMs and e-Chama, the management said yesterday.
This will bring down the number of branches to 30 from the current 42, a move that will lead to a staff layoff by the bank which has about 520 employees and a customer base of over 100,000.
“We have requested Central Bank of Kenya for approval of the process and we are waiting their feedback. We will notify our customers to enable a seamless transition of their banking relationships in the affected branches,” Marambii said.
Branches to be closed In Nairobi include the Githurai branch, Gikomba, Monrovia,Gateway, South B , Outer Ring road BOA direct, Likoni road BOA direct and Thika road BOA direct. This will reduce the number of branches in Nairobi to 17 from 25.
Others are Nanyuki branch,Embu,Kitale and Digo road in Mombasa.
“The process will follow guidelines laid down by the Central Bank of Kenya. In the process, some staff redundancies will occur,” Marambii said, though he did not reveal the number of staff to be affected.
The restructuring is expected to save the bank up to Sh225 million in operating cost, nine per cent of the current Sh2.5 billion annual spend.BOA becomes the latest lender to employ cost cutting measures which became rife after the law on interest rates came in place last year.
President Uhuru Kenyatta signed into law the 2015 Banking (Amendment) Bill on August 24, capping bank interest rates at four per cent above the Central Bank Benchmark Rate, currently at 10 per cent.