Barclays Bank Announces Sale of Three of Its Branches

By Soko Directory Team / July 8, 2019



Barclays is 2nd 'Best' After KCB in Asset Quality and Net Interest Margin SMEs

Last week, Barclays Bank of Kenya announced the sale of three of its branches namely, Bamburi, Maragua and Supplies valued at 65.0 million shillings.

This is in line with the lender’s strategy of deepening digital channels to accommodate the changing pattern of customer preferences towards alternate channels.

Previously, in the financial year FY’2017, the lender closed 13 branches as part of its consolidation strategy and drive to achieve operational efficiencies.

The branch rationalization measures resulted in the bank closing the financial year FY’2018 with 85 branches from the 121 it owned in FY’2016.

The lender has been implementing structural cost programs to cut costs through innovation and staff restructuring besides branch rationalization.

In FY’2017, staff restructuring saw 323 staff exit the bank as part of the rationalization process that saw the closure of 13 branches. Furthermore, in FY’2018, the bank conducted a voluntary staff exit scheme that saw 78 full-time staff leave.

In FY’2018, Barclays reported enhanced digital channel capabilities with transactions processed outside the branch rising to 70.0 percent in FY’2018, from 65.0 percent in FY’2017.

As a result of these measures, the bank reported a decline in its Cost to Income Ratio (CIR) by 4.0 percentage points to 51.0 percent in FY’2018, from 55.0 percent in FY’2017, adjusted for one-off restructuring investments and separation costs incurred.

The wave of branch rationalizations and staff restructuring in the wake of digitization has spread over the local banking industry, and as a result, the sector reported an improvement in operating efficiency as the CIR declined to 57.3 percent in FY’2018, from 61.1 percent in FY’2017, amid cost rationalization measures such as branch closures, staff layoffs in voluntary retirement plans and digitization strategies aimed at reducing operational costs.

The sector continues to expect increased adoption of technology to aid in improving efficiency and diversifying revenue.

Therefore, revenue growth coupled with cost containment will continue to boost the sustainable growth of the banking sector.



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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