Kenya’s Stanbic Bank takes a bet on expanding its retail customer base

Stanbic Bank Kenya has announced a plan to double its network of retail branches within three years as it moves its strategic focus to individual customers and small businesses. 

A report by Bloomberg news agency quotes Regional Chief Executive for East Africa, Joshua Oigara, as saying: “We will have to double the size of our network to bring in clients, because they are everywhere.”  

Stanbic Bank Kenya is a subsidiary of South Africa’s Standard Bank Group. In all, Standard Bank operates in about 20 African countries. 

According to Bloomberg, the bank plans to reach its target by pairing new locations with digital services and agent-based banking. Agents let customers handle basic transactions at local shops, which reaches people that a full bank branch might not support. 

A significant strategic change 

Given that Stanbic’s focus until now has been on corporate and investment banking, the move to retail expansion is represents a significant strategic change. 

Explains the investment website Briefs Finance: “Corporate lending … tends to be lumpy and depends on big projects. Retail banking brings a steadier stream of small transactions, which can smooth out earnings over time. 

“The fee angle matters just as much. A larger private-banking business should boost income from wealth management, card payments and cross-border transfers, adding what banks call non-interest revenue. 

“If the largest bank in Africa (Standard Bank) is chasing ordinary customers, it likely expects the next wave of banking profit to come from them. Stanbic is betting that showing up in more places, and on more phone screens, is the way to catch it.”