DTB joins league of large lenders after rise in market share
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“Diamond Trust Bank’s deposit base increased mainly in the last quarter of 2015 following the placement of Imperial Bank in receivership,” said the CBK’s full-year supervision report.
Diamond Trust Bank (DTB) has joined the class of large banks after its market share grew by 0.7 percentage points driven by new business from the collapsed Imperial Bank last year.
DTB’s market share grew to 5.32 per cent to rank seventh, up from position nine, and surpassed the five per cent mark used by the Central Bank of Kenya (CBK) to classify banks as large industry players.
The bank becomes the latest to join the league of large institutions after Commercial Bank of Africa joined the same in the previous year after increase its deposits through its mobile banking platform M-Shwari.
“Diamond Trust Bank [moved] from the medium peer group to the large peer group. The bank moved to the large peer group mainly due to increased deposit bases.
“Diamond Trust Bank’s deposit base increased mainly in the last quarter of 2015 following the placement of Imperial Bank in receivership,” said the CBK’s full-year supervision report.
DTB, together with KCB, were given access to deposits of collapsed Imperial Bank as Kenya Deposit Insurance Corporation sought to refund depositors up to Sh1 million placed with the ill-fated lender.
Downgraded to a small bank
The Imperial Bank customers had a choice on whether to withdraw their cash or open new accounts with KCB or DTB and keep the money there. KCB’s market share rose by 1.4 percentage points to cement its position as the largest lender in the country with a market share of 14.1 per cent.
Seven large banks now control 58.2 per cent of the banking sector up from 49.8 per cent in 2014 with medium-sized lenders being the main losers. Nigeria-based lender Guaranty Trust Bank was downgraded to a small bank after its market share dropped below one per cent to stand at 0.97 per cent, following a Sh2 billion shrinkage in its deposit base.
International lenders continued losing ground to local banks with Standard Chartered and Barclays being the two large banks whose market share shrunk. StanChart overtook Barclays to rank fourth having shed 0.19 percentage points, to have a seven per cent market share.
Barclays Bank’s market presence continued to shrink falling below the seven per cent mark to 6.94 per cent from 7.27 per cent in 2014 and 8.08 per cent in 2013.
The two lenders have been cited for responding slowly to local market opportunities as they seek approvals from the parent company.
Barclays has previously indicated that though the local entity had to participate in the group strategy, decision making at country level was left to the local team.
“In Kenya we are among the top five banks so the management team and board are able to make independent decisions themselves,” said David Hodnett, Barclays Africa Group deputy chief executive in a recent phone interview.
KCB, Co-op and Equity have cemented their positions at the top by taking advantage of new products such as agency and mobile banking to grow their reach and increase efficiency.
StanChart is yet to take up agency banking while Barclays started contracting agents this year with the model having been licensed in 2012. [email protected]
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