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NIC, CBA merger bank eyes SMEs with more outlets

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Commercial Bank of Africa Group Managing Director Isaac Awuondo (left) with his NIC Bank counterpart John Gachora when the two lenders announced the merger in Nairobi on January 31. FILE PHOTO | NMG

NIC Group #ticker:NIC and CBA Group, now merged into NCBA group, will open more branches in Kenya and the region as it eyes more small and medium sized businesses.

Currently with 85 brick and mortar branches in Kenya, NCBA group managing director John Gachora said Thursday that ultimately some of the current outlets would be merged, but more will be opened to take its reach beyond the 17 counties in Kenya where it has a footprint.

“We want to scale up retail banking through expanded distribution and that means our branch network must expand,” said Mr Gachora during the unveiling of the new brand in Nairobi.

“Our projections show that retail banking will offer the next big growth and so we want to expand to counties which are becoming significant centres of wealth.”

About 60 percent of banking sector’s revenue comes from corporate banking and treasury business with consumer and SME business contributing the rest.

The merger has left the new outfit with branch overlaps in places such as Thika Road Mall and Junction Mall while in some instances, the outlets face each other across the streets.

Mr Gachora said these will have to be merged but added that the plan is to open one or two new ones in strategic locations for each closed branch.

“Bank branches are obviously expensive but we will go for more affordable ones oriented towards sales as opposed to service. We want services to be digital,” he said.

The group has 12 branches in Tanzania, five in Uganda and three in Rwanda. In Ivory Coast, it runs as purely digital bank.

NCBA group designate chairman Isaac Awuondo said the staff size is already rationalised and there may be no need to cut jobs even after the lapse of one year period that competition watchdog said was mandatory to keep all employees.

“Our name is not an acronym for anything but a promise for a better bank because we have combined the best of our both. We want to deepen our presence and there may be no point to sack and start employing,” said Mr Awuondo.