NCBA, National Bank step up battle for retail customers

Saturday September 30 2023

NCBA Group Managing Director and CEO John Gachora during a media briefing in Nairobi, Kenya on August 24, 2023. PHOTO | NMG


Two Kenyan banks have this week entered into deals they hope will help expand their clientele, diversify their incomes and increase their loan books as competition stiffens for the small customers.

The National Bank of Kenya (NBK), a subsidiary of KCB Bank partnered with The Leadership Group and Ashitiva LLP to launch the National Business Forum, a consortium for small and medium-sized businesses.

As the only lending partner for the newly launched group, NBK will tap into retail customers as it seeks to help small businesses get access to much-needed finances to scale.

“We understand the unique challenges they face in securing financing and expanding their businesses. Our goal is to offer the support to overcome these, enabling them to realise their full potential,” said NBK managing director George Odhiambo.

At the same time, NCBA, which is among the largest lenders in Kenya, announced intention to fully acquire AIG Insurance, which could also see it bring on-board more retail investors.

Read: US insurer set to earn $13m in deal with NCBA


John Gachora, NCBA managing director, said the acquisition, once approved by their respective boards and regulators, will accelerate them “towards our ambition to become a universal bank that addresses a full set of our customers’ financial needs.”

NCBA is among the few banks in the country, which last year recorded a drop in the number of deposit accounts. In the year to December 2022, accounts held at the bank fell 9.2 percent to 29.4 million, according to the Central Bank of Kenya’s latest Bank Supervision Annual Report.

The bank mostly lost smallholder accounts — those with less than Ksh100,000 ($674) —majority of deposit accounts held at the tier-one lender. Owning AIG could boost its customer base as insurance claimers open new accounts with the bank.

NBK, on the other hand, recorded slight growth in the number of deposit accounts in the year to December 2022, but still ranks low in the total number, compared with peers such as Family Bank.

Latest CBK data shows that NBK had about 792,000 deposit accounts holding less than Ksh100,000 as of last December, a growth of 2.1 percent over the last year.