, NAIROBI, Kenya, May 16 – Standard Chartered Bank says they have no intention of buying out smaller banks even as consolidation looms in the banking sector.
The bank, which the oldest commercial bank in the country says the measures that have been taken by the Central Bank of Kenya will give assurance to stakeholders that the overall banking system is sound.
The bank however plans to increase its operations in the country as the economy continues to sustain its upward trajectory.
The Banks Chief Executive Officer East Africa Lamin Manjang however admitted that they have benefited from deposit flight from smaller banks following uncertainty in the market after three banks were put under receivership.
“We cannot say the numbers for obvious reasons, it’s not about who is losing or gaining , the most important thing is whether the banking system is sound, there is no point in having some banks being trusted and others not being trusted because at the end of the day it’s the entire system whose credibility is at stake,” he said.
Standard Chartered Bank has been in business for the last 104 years with total branches of 39 spread across the country.
The bank reported profit before tax of Sh9.2 billion, down 36 percent year-on-year. Customer deposits stood at Sh172billion.
Earlier Treasury Cabinet Secretary Henry Rotich said Kenya is overbanked citing that consolidation is vital going forward.
Speaking to Capital FM Business Rotich says banks need to merge rather than to compete for small markets.
He says he has planned to reintroduce the rejected proposal by the National Assembly to increase the minimum core capital for banks to Sh5 billion from the current Sh1 billion by December 2018.
“We need banks that are a big enough to finance the many projects that we are envisaging in the country and also leverage on the sharing of the knowledge of how institutions run. We will take more time to engage parliament to communicate the advantages of having consolidation in our system,” he explained.
Last week Standard Chartered Bank’s Group Chief Executive Officer, Bill Winters, met with President Uhuru Kenyatta at State House, Nairobi.
Withers said the bank will increase its presence in the country and expand the sectors it finances.
“We are looking for bright spots in the world and Kenya is one of them,” said Winters, adding that Kenya is on top of the list of the countries the bank targets for expansion.
President Kenyatta said Kenya appreciates the decision and asked the bank to start focusing on Small and Medium Enterprises as well as agriculture, which the bank used to support previously.
“I urge you to venture again in agriculture since it is the right time as we focus on value addition on agricultural products,” said the President.