Stanbic Bank Kenya Plans to Double Branches by 2029 in Retail Banking Push
Stanbic Bank Kenya plans to double its branch network from 40 outlets by 2029 as it targets retail customers and small businesses. The bank aims to increase low-cost deposits and reduce its reliance on more expensive wholesale funding. The Kenyan subsidiary targets a 25% return on equity by 2028, compared. . .
Stanbic Bank Kenya plans to double its branch network from 40 outlets by 2029 as it targets retail customers and small businesses. The bank aims to increase low-cost deposits and reduce its reliance on more expensive wholesale funding. The Kenyan subsidiary targets a 25% return on equity by 2028, compared with 16% currently, while pursuing annual revenue growth of up to 16%. Stanbic Bank Kenya plans to double its retail branch network within three years as it shifts its focus toward individuals and small businesses to capture cheaper deposits than wholesale funding sources. The Kenyan subsidiary of South Africa’s Standard Bank Group, Africa’s largest banking group by assets, announced the expansion plan through Joshua Oigara, regional chief executive for East Africa, on Thursday. The Nairobi-based lender plans to expand its current 40-branch network by 2029 while strengthening digital distribution tools and agent banking networks, according to comments reported by Bloomberg. Agent banking allows customers to conduct routine banking operations, including deposits, withdrawals and account openings, through merchants and partner outlets. The model has gained widespread adoption across East Africa. “We will have to double the size of our network to capture customers who are everywhere,”Joshua Oigara said. A Shift Toward Retail Banking GrowthThe expansion forms part of Standard Bank’s medium-term strategy to allocate more capital toward high-growth markets and reduce its dependence on South Africa, where economic activity remains weak. The move also represents a strategic shift for Stanbic Bank Kenya, which built its regional position around corporate banking and investment banking. By expanding its physical presence and digital services, the lender now aims to capture faster-growing segments, including small businesses, mass-market consumer lending and wealth management. Stanbic Bank Kenya already ranks among the three largest private banks in the East African country. The lender aims to become the market leader by 2028, according to Oigara. The executive said competition depends not only on balance-sheet size but also on technology systems, international products and advisory services. The bank expects a larger retail customer base to generate more deposits and reduce dependence on costly wholesale funding. It also expects private banking activities to increase fee income from asset management, card transactions and cross-border money transfers, improving non-interest revenue. Higher Profitability TargetsStandard Bank Group aims to achieve a return on equity of up to 25% by 2028, compared with 16% currently, while targeting annual revenue growth of as much as 16% over the period. Return on equity measures the profit generated from shareholders’ invested capital. Stanbic Holdings, the Nairobi-listed company overseeing the Kenyan operations, reported a 1. 1% increase in net profit for the first half ended June. The company benefited from a 4% rise in net interest margin, while total assets increased by 27% during the period. The bank’s strategy faces challenges in a market where domestic lenders dominate retail banking and mobile financial services. In addition, lower Kenyan policy rates are putting pressure on banking-sector interest margins and pushing lenders to seek more fee-based revenue. Standard Bank operates in about 20 African countries and plans to release its half-year results in the coming weeks. The report will provide further insight into the contribution of East African subsidiaries to group revenue. Standard Bank shares traded at 33,143. 00 rand on the Johannesburg Stock Exchange on Thursday, gaining 0. 21%. This article was initially published in French by Fiacre E. KakpoAdapted in English by Ange J. A de Berry Quenum