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Co-op Bank is opening five branches, bucking closure trend

Cooperative Bank of Kenya group managing director Gideon Muriuki. FILE PHOTO | NMG
Cooperative Bank of Kenya group managing director Gideon Muriuki. FILE PHOTO | NMG 

The Co-operative Bank of Kenya #ticker:COOP is set to open five new outlets across the country, bucking the trend that has seen several lenders announce branch closures in recent weeks.

Co-op Bank will in coming weeks open new branches in Kilimani, Litein, Emali, Makongeni (Thika) and Utawala, locations it says represent untapped potential given their increasing population and trade.

Local lenders have, following the enactment of the interest capping law late last year, announced culling of branches or a freeze on expansion in a bid to protect their bottom lines from lower revenues.

“Our aim is to grow all service channels and let the customer choose which one is best for them for each transaction as opposed to us dictating their choice,” Gideon Muriuki, the bank’s managing director, said in an interview.

“Whilst some customers will do some transactions online or on a cellphone, a significant section of customers will always prefer to engage a bank through a physical branch, especially for certain services.”

The new outlets will bring Co-op Bank’s local branch count to 150, and builds onto recent openings at Jomo Kenyatta International Airport (JKIA), Two Rivers Mall and Ridgeway Branch on Kiambu Road.

The bank also has three branches in South Sudan.

Standard Chartered Bank (StanChart) #ticker:SCBK recently announced plans to shut down four of its branches at the end of next month.

Barclays Bank of Kenya (BBK) #ticker:BBK plans to close seven branches beginning October 1.

Retrenchments

Bank of Africa Kenya, Ecobank, Family Bank, Sidian, and First Community Bank have recently announced the retrenchment of tens of their staff, attributing this eventuality to the interest rate capping law.

Banks are now culling branches to reel in costs as margins from loans – their main income generator – shrink.

Co-op Bank is seemingly treading a different path than its peers, increasing its physical presence across the country.

“We believe there is no one single channel that will displace all others; rather, it’s the investment in an optimal and balanced multichannel strategy that will offer a fulfilling experience to the customer,” said Mr Muriuki.

“We are also pursuing a county strategy. The devolved government has spurred trade and increased settlements in many towns across the country. A physical branch proves to these businesspeople that you are ready to trade with them.”

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