Increased regulation in the Kenya banking Sector with price controls following enactment of the Banking (Amendment) Act 2015 and an increase in loan loss provisioning, with an average growth of 93.8% in Q3’2016 has seen earning decline since January.
As a result, some banks opted for staff cuts – Family Bank, Sidian Bank, First Community Bank, Equity bank Group- others resorted to innovate and protect their income streams as well as venture into new segments targeting the Small Medium enterprises (SMEs).
For instance, Barclays Bank Kenya gross Non-Performing Loans and advances increased by 49.3% to KSh 10.4 billion compared to KSh 5.3 Billion as of Dec 2015.
Net NPLs exposure came in at KSh 2.3 billion vs KSh 1.03 billion in Dec 2015. Insider loans were unchanged at KSh 13.3 billion.
This resulted into a Profit before tax for the period ended September 30 2016 declining by 4.4% to KSh 8.7 Billion compared to KSh 9.1 billion posted in the same period in 2015 for the bank.
Jeremy Awori, the Chief Executive officer/Managing Director at Barclays Bank of Kenya Ltd sees this as an opportunity for the bank which realised a growth of 16.6 percent in Total Interest income from KSh 18.5 billion to Ksh 21.1 billion of which interest accrued from loans and advances to customers grew slightly from Sh 13.6 billion to 15.5 billion.
Awori says technology is the new frontier for the Kenya’s consumer that demand modern banking services in a market that is ranked number one in inclusive financial services by the Brookings Institution’s 2016 Financial and Digital Inclusion Project with an overall score of 84 percent.
Speaking at the Barclays Bank blogger engagement held at Nailab, Nairobi, Awori said they have enhanced their customer’s experience through the roll out of new products and enriched digital channel functionalities, installation of new intelligent automated Teller machines (ATMs) and reduced service time at the branches through an improved queue management system.
“We were also the 1st bank to launch mobile banking in Kenya,” said Awori.
Through the mobile and internet banking they have been able to manage cost and increase efficiency. This has enabled their customers have real time cash deposits and money transfers to mobile phones through a service dubbed CashSend.
The Bank’s mission is to help people achieve their ambitions in the right way in order to prosper and the Bank’s ambition is to be the ‘go-to’ bank for all its stakeholder communities.
“With our shared growth plans, we are helping our customers achieve their Ambitions in the right way. In all we do we put our clients and customers at the centre of what we do,” says Awori.
Caroline Ndung’u, Corporate Relations Director says to fully enhance and leverage on technology, they have launched the bank’s new website featuring local content to help their customers navigate and get what they want with ease.
“We realised that we can’t communicate to our stakeholders unless we have a strong and elaborate digital communication strategy. Through BarclaysEngage we hope to get more insights on how we can improve our digital engagements so as to reach as many people as possible,” says Caroline. “The internet has become more ubiquitous with citizen journalism growing. In KE, the power of citizen journalism is best illustrated by Kenyans on Twitter.”
“With our BarclaysEngage session we’ve set aside time to talk with our stakeholders in order to know what they’re feeling about our business,” added Awori.
The bank covers different segments across: retail and Business Banking unit, Corporate and Investment Banking and Markets and Insurance.
According to the CEO, their new revenue generating streams such as bancassurance, SME, fixed income trading, investment banking and stock brokerage; and revamped existing businesses are leveraging their growth prospects.
“We’re excited about insurance since we’ll be more than service providers. Customers can now get protection for what matters.”
With the implementation of the Banking (Amendment) Bill, 2015 aimed at regulating interest rates charged by banks. The law has seen banks charge interest rates at 4 percent above the Central Bank’s lending rate currently at 10 percent.
Data from the CBK shows banks made a profit of Sh10.9 billion in September, but dropped to Sh9.3 billion in October, the full month the sector operated under the new law.
However, Barclays Bank of Kenya believes that with their focus now onto the customer, they will continue to be digitally proficient to enhance customer engagement, ultimately achieving improved brand loyalty and profitability.