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Co-op Bank to open seven new branches

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Co-operative Bank CEO Gideon Muriuki. He earned the largest bonus of Sh266.4 million, cementing his position as Kenya’s highest-paid banking executive. FILE PHOTO | NMG

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Summary

  • The ongoing expansion will raise the bank’s total branches to 200, bucking the trend of maintaining or reducing brick-and-mortar outlets seen among the other big banks.
  • Co-op Bank said it will open new branches at Kamakis on Nairobi’s Eastern Bypass, Kabarnet, Iten, Moyale and Mwiki/Kasarani. Others are at Bunge, the new Parliament Tower in Nairobi, and Kamulu in Nairobi’s Eastlands.

Co-operative Bank of Kenya #ticker:COOP is set to open seven new branches in the country this year, expanding its physical presence in areas it sees opportunities to grow its customer base.

The ongoing expansion will raise the bank’s total branches to 200, bucking the trend of maintaining or reducing brick-and-mortar outlets seen among the other big banks.

Co-op Bank said it will open new branches at Kamakis on Nairobi’s Eastern Bypass, Kabarnet, Iten, Moyale and Mwiki/Kasarani. Others are at Bunge, the new Parliament Tower in Nairobi, and Kamulu in Nairobi’s Eastlands.

The lender said it is opening new branches despite migrating 90 per cent of transactions online because its large base of retail clients and partners – individuals, saccos and agents— needs cash management and other support services.

“The emerging theory that bank branches and ATMs will cease to exist is largely wishful thinking driven by desire to cut brick-and-mortar costs, and not by credible customer feedback on the service outlets through which customers prefer to be served,” Co-op Bank’s chief executive Gideon Muriuki said.

Banks in general have been keen to avoid spending more on opening new branches, betting on existing distribution networks and alternative channels such as agent, mobile and internet banking to serve customers.

Businesses and a section of retail clients however still prefer to do business with a bank operating a branch in their vicinity, meaning that an aggressive closure of brick-and-mortar outlets can result in loss of customers.

Lenders that have closed the most branches are typically strong in corporate banking and believe their portion of retail clients can be served through the digital banking platforms.

The new branches being opened by Co-op Bank are part of the implementation of its medium term strategy focused on local expansion. The bank has said that it is yet to maximise opportunities in the Kenyan market which remains the most profitable for homegrown lenders.