Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Major restructuring at KCB

NAIROBI, Kenya Jan 27- The Kenya Commercial Bank (KCB) Group has said it is implementing a Transformation Program for the bank as it seeks to reposition itself for growth.

The program includes a host of key projects that seek to enhance the group\’s productivity and enhance shareholder value.

The program that is expected to run for up to two years, aims at reviewing the current corporate governance structures suitable for its regional operation.

Briefing investors on the bank\’s plans, KCB Group Chairman Peter Muthoka said one of the areas the bank would be operational changes that would result in efficiency and cost reduction.

"We want to move KCB from being a good business into becoming a great business. We are implementing the program that will accelerate growth and enhance productivity, Mr Muthoka said.

The transformation program is being implemented on recommendation of McKinney Rogers, a global business consultancy firm, which was engaged to restructure the bank.

The board of directors has set up a Transformation Committee that will implement the program.

Also under review is staff roles within the group that raised fears of layoffs.

Group CEO Martin Oduor-Otieno however downplayed any radical staff layoffs only saying that they would review job roles and people placement within the group in a way that best suited the bank.

Advertisement. Scroll to continue reading.

"All parts of the business are going to be affected. However, we are trying to position the exercise that is targeted at creating value for KCB\’s stakeholders, Mr Oduor-Otieno said.
 
KCB is the largest bank by assets which currently stand at Sh195 billion. It is also the region\’s largest commercial bank with 2,173 branches with operations in Kenya, Tanzania, Uganda, Rwanda and Southern Sudan.

During the period when the bank was expanding, KCB\’s wage bill increased from Sh3.8 billion in 2005 to Sh7.1 billion in 2009.

The bank\’s expansive operations have put pressure on the cost income ratio. Transformation Committee Chairman Sunil Shah said the bank would be looking to reduce operational costs by 20 percent.

Another area of focus for the regional bank will be its customer service, as it seeks to boost its customer base.

"From the close to 1.5 million customers we have we are targeting between two-three million new customers during the period," Mr Shah said.

Mr Muthoka said the bank expects the project to result in operational changes that will lead to efficiency, increase its market share and deliver improved returns on investment.

"We have put in place modalities that will minimise disruptions to the business during the period of the project," Mr Muthoka said.

Follow the author at https://twitter.com/MjKaranja

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...