Pan African lender Ecobank will be closing five upcountry branches as it consolidates its digital strategy.
The branches to be closed include are Rubavu, Muhanga, Musanze, Nyagatare and Rwamagana. The bank said customers at the affected braches will be moved to agency banking after regulatory approval is secured.
However, the bank has not made public the number of layoffs.
“Going forward, I think for us the buzz word is going digital. Our future is anchored around creating a digital bank. We are going to rely less on branch network. The most efficient way to reach the unbanked is digital combined with agency banking,” said Ecobank Rwanda managing director Alice Kalonzo Zulu.
She says combining the digital strategy with agency banking will expand the banking base three times the current numbers.
The lender is betting on its Ecobank Mobile App to facilitate customer’s transactions. The bank rolled out its Ecobank Mobile App in February this year.
The app enables customers to open and operate their accounts without physically visiting the branch.
The Rwandan office is still weighed down by non-performing loans and provisioning, which pushed it into loss-making in 2016 and the first half of this year.
In the full year 2016, the lender posted a pre-tax loss of $131 million. In the first quarter of 2017, the bank reported a pre-tax profit of $75 million, a decline of 17 per cent from a year earlier.
The bank’s audited statement of comprehensive income for the year ended 2016 shows Ecobank Rwanda recorded a Rwf3.2 billion loss after tax compared with a profit of Rwf706 million in 2015.
Ms Zulu earlier told this paper that the losses were recorded after the bank opted to review its risk asset portfolio and make additional net provisioning of Rwf8.3 billion in 2016 in line with regulatory requirements as well as reflecting the challenging operating environment.