Guaranty Trust Bank (GT Bank) has embarked on restructuring to close down non-performing branches. The bank, which took over Fina Bank operations in 2014, has started with the shutdown of its Ngong Road branch located on Piedmont Plaza in Nairobi.
In a notice to customers seen by Business Today, the management says it would be closing the branch at the end of September. Sources at the bank say management is evaluating other ‘slow’ branches to decide their fate.
“In a bid to re-strategize our operations and continue to offer excellent and efficient service, we hereby advise that we shall be closing our Ngong Road branch on 30th September 2019,” the circular says.
Customers of the affected branch will be absorbed within its network, mainly by the Karen Branch.
“For our Ngong Road branches customers, kindly be advised your account will remain as is,” says the circular, signed by Executive Director Victor Egaza and Settlements Manager Charles Kirimi. “Further to this, you will be able to access your usual banking services at our Karen Branch or any of our other branches.”
The circular says customers can still access banking services through alternative channels including ATM, Internet and mobile banking.
Currently, GT Bank has eight branches countrywide which include Karen, Kimathi Street in Nairobi CBD, Industrial Area, Westlands at its head office, Nanyuki, Thika, Mombasa and Ngong Road. From October, it will have only seven.
The closure is part of a growing trend in the banking industry where banks are cutting down on physical branches as technology powers alternative ways of accessing banking services. Since branches are more expensive to operate and maintain and often take a huge chunk of banks’ operational expenses, managers are making the painful decision of phasing out those that cant break even.
At GT Bank, branch closure could be a signal of slow growth as competition grows and customers find alternative banking solutions.
Rise of West Africa Banks
The Pan-African lender, with head offices in Nigeria, also has subsidiaries in Uganda, Tanzania, and Rwanda. Early this month, it emerged the overall best bank in Africa and Nigeria at the EuroMoney Africa Awards for Excellence.
Guaranty Trust Bank acquired a 70% stake in Fina Bank in 2014 in a deal worth about $100 million (Ksh10 billion). All Fina Bank branches across the region in Kenya, Uganda and Rwanda were renamed and rebranded as subsidiaries of GTBank.
Other West African banks that have ventured into the East African region to tap into its fast-growing economies and opportunities include Ecobank, UBA Bank and Access Bank.
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