Family Bank to close three branches in cost cutting plan

Family Bank is set to close two of its branches in the next two weeks and one more in the next six months in a move aimed at cutting costs to boost the bottom line.

The lender, which let go about 150 employees across its branches last December, says shutting down the outlets will save about Sh36 million annually.

The bank posted a net loss of Sh743 million in nine months to September 2017, compared to a net profit of Sh963 million in a similar period the previous year.

“We intend to close Family Bank Tom Mboya branch in Nairobi, Family Bank Kisumu Reliance Bank in the next two weeks and Family Bank Bamburi branch in Mombasa in the next six months,” said managing director David Thuku in an interview.

He said employees in the three affected branches will be re-deployed to other branches across the county. The three branches have about 30 staff members.

Customers in the affected branches will access services such as cheque book collection, ATMs and Family PesaPap agency in nearby branches.

“The Family Bank Tom Mboya branch in Nairobi will be relocating to River Road West on River Road near the River Road/Latema Road Junction and adjacent to Davis and Shirtliff. Similarly, in Kisumu, Kisumu Reliance Branch will be merged with Kisumu Express Branch. The two are just a couple of metres apart,” said Mr Thuku.

READ: Family Bank issues profit warning after nine-month net loss

“In Mombasa, the Family Bank Bamburi branch will be closing down due to a change in the economic viability of the branch within its current location and its operations shall be moved to Family Bank Digo branch. This will take effect within six months.”

The mid-sized lender which will be left with 91 branches after the shutdown posted a 46 per cent net interest earnings to Sh2.94 billion in 2017 in the nine months through September from Sh5.47 billion the previous year.

Its staff cost dropped by nearly a fifth or about Sh400 million to Sh1.6 billion in the period.