M Oriental Bank says it has stopped offering Automatic Teller Machine (ATM) services in a strategic shift that will see the lender target wealthy family-run businesses.
The newly acquired lender which was formerly known as Oriental Commercial Bank on Wednesday said it will mostly focus on banking large family businesses in a bid to grow its loan book and balance sheet.
“M Oriental Bank is being repositioned as a wholesale bank focused on large family businesses in Kenya offering innovative products and services. We will not be offering ATM services,” said the M Holdings Group chief executive officer Sanjeev Kumar on Wednesday during the unveiling of the bank’s new identity in Nairobi.
M Oriental assumed the new business strategy Wednesday after completion of its acquisition by its new majority shareholders Bank M Tanzania Plc.
Bank M in early June became the first Tanzanian lender to enter the Kenyan market after 73 per cent of its shareholders under the M Holdings Group agreed to buy a 51 per cent stake in Oriental Commercial Bank.
Later on June 22, the Central Bank of Kenya (CBK) cleared the acquisition of a 51 per cent stake in the shareholding of Oriental Commercial Bank by the Tanzanian lender setting the stage for its entry into Kenya.
The regulator also approved an application by M Holdings Limited to form a non-operating holding company as required by law as well as a change name from Oriental Commercial Bank Limited to M Oriental Commercial Bank Limited.
Mr Kumar said M Oriental will seek to replicate its niche business model that has seen the Group’s Tanzanian unit attain success by restricting banking services to high net worth individuals and family businesses.
Mr Kumar said he sees a huge opportunity for growth under the segment, exploiting the fact that a majority of lenders in the Kenyan banking sector operate universal banking models therefore neglecting the segment.
“We have created Bank M as a strong wholesale bank in Tanzania and we aspire to transform M Oriental as the preferred bank for large family businesses in Kenya,” he said.
A recent study by Visa International showed that a majority of high net worth account holders around the world do not use ATM machines preferring to swipe their cards instead.
Most banks operating in Kenya place ATM withdrawals limits at between Sh20,000 and Sh50,000.
Mr Kumar said as part of a strategy to target the family businesses, M Oriental would strive to offer personalised service to its clients besides operating all days of the week including Sunday between 8 am and 6pm subject to approvals by the CBK.
“We aim to grow in the crowded Kenyan banking space in the wholesale banking space by being disruptive and offering the large business families a unique banking experience based on a quality of service delivered through a minimum client coverage standard of at least one client facing staff member for every three clients.
In Tanzania, Bank M currently has 305 families as clients and a client facing staff complement of 174,” he said.