Market News

Banks open 38 branches despite adopting technology

A Diamond Trust Bank ATM lobby at Garden City Mall in Nairobi. FILE PHOTO | NMG
A Diamond Trust Bank ATM lobby at Garden City Mall in Nairobi. FILE PHOTO | NMG  

The number of commercial bank branches in the country increased by 18 to 1,541 last year despite pressure on brick-and-mortar concept. However, 20 branches closed in the year as 38 new ones opened.

Central Bank of Kenya (CBK) data shows Nairobi County registered the highest increase in new branches at 17 branches.

Baringo, Kajiado, Machakos and Meru opened two each. Bomet, Elgeyo Marakwet, Embu, Garissa, Kakamega, Kirinyaga, Kisumu, Laikipia, Lamu, Marsabit, Siaya, Narok and Vihiga counties witnessed the opening of a branch each.

A total of 15 out of 47 counties registered a decrease in the number of bank branches, however.

The CBK said the decrease in physical bank branch expansion in the rural counties is partly attributed to the adoption of alternative delivery channels such as mobile banking, Internet banking and agency banking.

However, the CBK report shows that the number of ATMs dropped by 62 last year.

The branch network for microfinance banks grew by three to 112 from 109 in 2015.

Several banks have recently sent staff home and some have closed branches.

However, Co-operative Bank #ticker:COOP, the country’s third-largest lender by assets shocked the market on July 21 by announcing it is prepared to buck the trend by opening new branches.

The lender opened three branches in Nairobi, saying it planned an additional four in market towns bringing its total branch network to 150.

“We have opened branches in JKIA Nairobi, Two Rivers Mall and Ridgeway Branch on Kiambu Road. We will also be opening new ones in Litein, Emali, Makongeni-Thika and Utawala-Nairobi,” bank’s group chief executive Gideon Muriuki.

“All determined through market research.”