Wed, Mar 07, 2018 - Page 10 News List

National Bank of Kenya may shutter several branches


National Bank of Kenya Ltd (NBK), which has the biggest bad-loan book in the Kenyan banking industry, is considering closing some of its 85 branches to cut costs, chief executive officer Wilfred Musau said.

Lenders in east Africa’s biggest economy are being forced to lower expenses after a government-imposed cap on commercial lending rates impaired their ability to provide loans and as consumers embrace digital banking, including Safaricom Ltd’s M-Pesa platform.


Banks have closed at least 39 branches and cut 1,620 jobs since the caps were announced in August 2016, according to Cytonn Investment Management Ltd, a Nairobi-based money manager.

NBK will make a decision early in the second quarter on the number of outlets it will shut, Musau said on Monday in an e-mailed response to questions.

“This is a decision based on the strategic positioning and profitability of a branch,” Musau said.

The lender cut 150 jobs last month.


NBK, in which the Kenyan Treasury and the state-run National Social Security Fund own a 64 percent stake, had the worst non-performing loan book in Kenya in the third quarter at 44 percent of total loans, according to Cytonn.

Co-Operative Bank of Kenya Ltd, the third-biggest Kenyan bank by market value, has the lowest ratio at 6.4 percent.

NBK shares have dropped 12 percent this year, underperforming the Nairobi Securities Exchange All Share Index, which has risen 5.9 percent over the same period.

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