Commercial banks opened 62 new branches last year, the highest in nearly a decade, amid a renewed drive to sign up more customers to boost their businesses.
The number of bank branches opened in 2024 is the highest for a single year since 2015, when lenders opened 80 new outlets, data by the Central Bank of Kenya (CBK) said.
CBK records shows that banks opened 16 new branches in 2022 and 36 in 2023 as lenders ramped up the opening of brick-and-mortar halls as an approach to securing the next set of customers.
The rise in bank branches has sustained the growth of jobs in the banking industry, with estimates suggesting it takes at least 50 employees to run one banking hall.
“The number of bank branches increased from 1,511 in 2023 to 1,573 in 2024, which translates to an increase of 62 branches,” CBK said.
“The increase in bank branches is mainly attributed to the opening of new branches by some commercial banks in emerging and new growth areas” it added.
I&M Bank Kenya said it would open at least nine new branches in the opening quarter of 2025 in its drive to accelerate its retail banking business.
The lender aims to reach 100 branches by the end of 2026 under its three-year strategy and ended the second quarter with 64 branches and 2,018 staff to support its customers, estimated at 562,200.
The bank is banking on the expansion of brick and mortar to raise its share of retail banking in the country.
“A big part of our strategy is to really scale up our retail business. Historically, I&M Bank has been a fantastic corporate and SME bank. Part of our strategy is to build up retail banking. To do that, we are trying really hard to become globally relevant for Kenyan consumers,” said I&M Bank Kenya CEO Gul Khan.
Retail banks offer financial services for the general public, ranging from everyday spending on needs such as food to life events such as buying assets.
Banks have leveraged brick-and-mortar even as more transactions go digital, suggesting the ideal strategy to grow their business in Kenya as a mix of both physical branches and internet-based platforms.
Other lenders to raise their branch count have been Absa Bank Kenya, Stanbic Bank, NCBA, and Diamond Trust Bank.
(DTB Kenya has favoured a larger branch network to cement its position in Kenya, where it has its key market in the region, even as it operates in Tanzania, Uganda, and Burundi.
The tier I lender sees physical branches as important in the recruitment of new customers and boosting service delivery.
The distribution of new bank branches has, however, uncovered income inequalities where most banking halls are concentrated in wealthier counties.
The branch concentration underscores the economic inequality facing the country, where towns/centres far from manufacturing and agricultural hubs are underserved by financial institutions.
The new branches opened last year remain concentrated in largely urban areas, extending the bias for banks to operate in wealthier parts of the country.
Kiambu County registered the highest increase in the number of bank branches, which rose by nine.
“A total of 30 counties registered an increase of 65 branches, while three counties registered a decrease of three branches. In 14 countries, there was no change in bank branches,” added CBK.
Mombasa and Uasin Gishu saw the second and third highest rise in branch count at five branches respectively, while the capital Nairobi, saw just a single new branch opened.
The counties of Isiolo, Nyamira, and Taita Taveta each lost a single bank branch, while the rural counties of Garissa, Mandera, Marsabit, Wajir, Samburu, and Tana River closed the year with less than 10 branches.
Standard Chartered Bank Kenya has bucked the trend among tier I lenders as it remains lean in size, with its leadership instead betting on digitization to widen its customer reach.
“Now we are in the final leg of the digital lending journey. This is going to make a big difference in small-ticket loans or even some of the bigger loans in the system. That is going to change the entire mass retail proposition to become another key driver of profitability,” Standard Chartered Bank Kenya chief executive officer Kariuki Ngari said.
