NIC Bank puts on hold expansion outside E. Africa

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The bank says it will first focus on consolidating gains in eastern Africa where it operates in Kenyan, Uganda and Tanzania.

NIC Bank has put on hold plans to open foreign subsidiaries in the race to consolidate its present operations that include Tanzania and Uganda.

The bank has been keen to establish pan-African operations and in 2012 mentioned plans to enter South Sudan, Democratic Republic of Congo, Burundi and Rwanda

Now, the bank says it will first focus on consolidating gains in eastern Africa where it operates in Kenyan, Uganda and Tanzania.

“In the short-term we want to grow the business there (Uganda and Tanzania),” said John Gachora, who was tapped as NIC managing director in September. “We are also looking at county governments and the opportunities they present.”

Rights issue

Mr Gachora was tapped from Barclays South following the appointment of James Macharia as Health secretary in May. NIC Bank joins Equity and KCB Bank in freezing expansion outside East Africa.

Equity says it will move out of the region once foreign divisions start generating at least a quarter of its income.

Regional expansion is becoming important as the East Africa Community (EAC) common market takes shape, opening way for free movement of factors of production in a market of 140 million people.

Kenyan companies are racing to open subsidiaries in the region with banks following suit. They include Equity, KCB and Co-operative Bank. NIC Bank last year set aside Sh608 million to inject in its Tanzanian subsidiary via a rights issue.

Mobile banking

This raised its ownership in NIC Tanzania above the 51 per cent stake the Nairobi bourse listed bank held in the unit since 2009.

The lender started operations in Uganda in 2012 where it wholly owns NC Bank, which returned a loss of Sh24 million in the first year. The bank’s share has gained 3.39 per cent over the past three months to Sh61.

Mr Gachora was speaking after launching the bank’s online and mobile banking platform dubbed ‘NIC Now’.

The application allows customers to perform transactions such as cheque deposit, standing orders, account opening, diaspora banking, balance enquiry, M-Pesa, bill payments and fund transfers from the comfort of their phones.