Bank of Africa on Friday January 20th 2017 announced it will be closing 12 of it’s 42 branches operating across the country. The bank with operations in 18 African nations has been operating in Kenya since 2004 and provides banking services to corporate, SMEs and retail customers.
The reason given for the closures is the ongoing digitization of the bank’s services which will render some of it’s 520 total workforce redundant.While speaking to journalists on Friday, Bank of Africa Managing Director Ronald Marambii said,
“We cannot tell exactly how many will be affected as at now and we can only determine that later. Some staff redundancies are expected though.”
Nairobi County where Bank of Africa operates the most branches in Kenya will be the worst hit as it will have 8 of its current 25 branches winding up their activities. Another four branches will be gradually phased out as part of the ongoing restructuring of the bank’s operations,
The increased adoption of financial technology by banks as a way of improving their legacy systems has resulted in the down-sizing of staff whose roles are now becoming automated. In 2016, Equity Bank laid off some of it’s employees as the bank shifted its market approach from reliance on physical branch networks, to digital platforms such as Equitel. This was aimed at improving service delivery and targeting a youthful more technology driven demographic.
The announcement paints a bleak picture on the state of the banking sector which was directly affected by the passing of the Banking amendment bill. The bill signed into law by President Uhuru Kenyatta seeks to set a cap on the interest rates banks can charge on loans. The move has seen commercial banks looking to reduce their staff in a bid to cut down on operating costs as well as maintain profit margins.