Hundreds of Kenyans are staring at job losses after the country’s bank with biggest bad-loan book announced it was planning to close down some of its branches to cut costs.
National Bank of Kenya Ltd Chief Executive Officer Wilfred Musau said that the bank was considering closing some of its 85 branches to cut costs.
“This is a decision based on the strategic positioning and profitability of a branch,” Musau said on Monday, Bloomberg reported.
The lender which cut 150 jobs last month plans to make the official announcement early in the second quarter on the number of outlets it will shut.
National Bank joins other lenders in Kenya who have been forced to close down in recent months due to massive losses occasioned by government-imposed cap on commercial lending rates and consumers moving to digital banking.
Banks in East Africa’s biggest economy have closed at least 39 branches and cut 1,620 jobs since the caps were announced in August 2016, according to Cytonn Investment Management Ltd., a Nairobi-based money manager.
NBK, in which the Kenyan Treasury and the state-run National Social Security Fund own a 64 percent stake, had the worst non-performing loan book in Kenya in the third quarter at 44 percent of total loans, according to Cytonn.
Co-Operative Bank of Kenya Ltd., the third-biggest Kenyan bank by market value, has the lowest ratio at 6.4 percent.
NBK shares have dropped 12 percent this year, under-performing the Nairobi Securities Exchange All Share Index, which has risen 5.9 percent over the same period.