NCBA bank to scale up retail, digital lending

Barely days after Kenya’s central bank gave nod to the merger of NIC and CBA banks, the new entity has hit the ground running with plans in motion to upscale key areas namely; digital and retail banking in a bold move the group’s CEO believe will see the brand compete effectively in the now sophisticated financial market.

“I think these two areas plus more will be our key priorities going forward, this is just the beginning,” said the Group’s managing director John Gachora.

CBA’s Group Managing Director Isaac Awuondo will serve as the designate Chairman of NCBA Bank Kenya PLC with his counterpart at NIC Group John Gachora serving as NCBA Group Managing Director.

The merger has also given the NCBA group 9.9 per cent market share in Kenya’s financial services sector and a customer base of over 40 million in four East African countries as well as see the Group’s operations creating the 3rd largest bank in the country after Equity and KCB banks.

Over the past two years, things have been challenging for Kenyan banks especially since the introduction of the new cap in lending. However, this has not stopped them from making profits. In fact, the capping of interest only affected their loan books since banks refrained from lending to SMEs and individuals citing high risk.

This means that despite the tighter lending environment, banks have found alternative routes and sources of revenue.

The banks have adopted smart and digital ways of reaching out to the customer through new channels.

Banks in the country, however, have taken advantage of the relatively robust growth despite challenges posed by the interest rate framework. Even though more regulatory challenges still remain, other banks are still expanding their asset base.

The power in banking in Kenya is unquestionably shifting towards Kenya Commercial Bank (KCB) whose asset base surpasses that of all other banks in the country. It ranks as the first bank in Kenya by assets.

KCB’s full-year results for 2018 showed that its asset base stood at 714.31 billion shillings, a 10.5 percent growth from the 2017/2018 financial year.

Although by holding the top financial position by assets doesn’t mean it has the highest concentration of wealth, it shows that a lot of the country’s wealth flowing through the bank.

In second place is Equity Bank, which, according to its 2018 full year financial results, its asset base stood at 573.38 billion shillings.

This was a notable increase from the 2017 full year financials where the balance sheet registered 524.5 billion shillings. According to the bank, the growth was due to its commitment “pursuing to navigate the headwinds of the slow growth rate of the private sector credit.”

In the third position is the merger between NIC Bank and Commercial Bank of Africa (CBA) which brings the total assets of the consolidated bank to 444 billion shillings since NIC Bank posted 208.50 billion shillings as CBA registered 242.56 billion shillings in their balance sheets as evidenced by the 2018 financial results.

In the fourth position is the Co-operative Bank of Kenya with assets worth 413.41 billion shillings as of 2018. Diamond Trust Bank comes in fifth with assets worth 377.72 billion ahead of Barclays Bank with an asset base of 324.84 billion shillings.

The CFC Stanbic Bank makes it to the 7th position with 290.57 billion shillings worth of assets followed by the Standard Chartered Bank whose assets stood at 285.40 billion at the end of the 2018 financial results.

The rest of the banks that follow the Standard Chartered Bank according to the 2018 financials (unless otherwise indicated) are as follows. The asset base amount is in shillings.

I&M Bank – 230.29 billion

National Bank – 113.34 billion as of the first quarter of 2018.

Bank of Baroda – 123.01 billion

Citibank N.A Kenya – 100.76 billion

Family Bank – 66.90 billion

Housing Finance Bank – 65.51 billion

Gulf Africa Bank – 32.40 billion

Victoria Commercial Bank – 32.34 billion

Sidian Bank – 25.33 billion

Habib Bank AG Zurich – 21.236 billion

First Community Bank – 15.78 billion

United Bank of Africa – 15.30 billion

Credit Bank – 14.46 billion as per the 2017 financial results

Consolidated Bank – 12.57 billion

Spire Bank – 10.83 billion according to the third quarter of 2018.

Oriental Commercial Bank – 10.58 billion

Transnational Bank – 10.11 billion

Development Bank – 8.63 billion

Middle East Bank – 5.36 billion

Bank of India – 2.607663 billion

The financials were sourced from the banks’ websites with comparisons from www.rich.co.ke.

More than ten registered banks in Kenya do not show in the list because they have not updated their financials in a while. There were no recent data to show how their balance sheet ranks.