[2008-09-08]  NBK hunts for customers amid growing turf wars
Mr Reuben Marambii September 4, 2008: After completing a 10- year consolidation programme, the National Bank of Kenya (NBK) is hunting for customers in the face of growing competition for depositors.In its three-year strategic plan that runs from 2008 to 2010, the bank has earmarked certain locations in the country for opening up of new branches.In the last few weeks, the bank has opened branches at Moi’s Bridge in the Rift Valley, Kianjai in Meru North and another at Mutumo in Kitui.The bank’s managing director, Mr Reuben Marambii, said they looked forward to opening another four branches to bring the total to seven by end year.According to Mr Marambii, feasibility studies on the new branches has been carried out and development plans drawn.The bank has started to implement the expansion programme after successfully completing the consolidation process and now aims at taking advantage of emerging opportunities.“We have been doing consolidation, which especially concerned non-performing loans and improving certain ratios in our balance sheet,” said Mr Marambii. NBK has been dogged by a bad debt burden amounting to KES38bn three years ago. Mr Marambii said the outstanding amount for non performing loans now stands at KES5billion. Last month, the bank announced KES902mn in profit before tax in its half year period representing a 46 per cent rise from Sh617 million posted in the same period last year. As a sign of an improving bad debt portfolio, the bank reduced its provisions for bad debts from KES50mn to KES240mn this year while its customer deposits increased from KES32.6mn to KES34mn. The bank has also been engaged in a two year plan to reduce its deficit for reserves to enable it to pay dividend to its shareholders.Restructuring programme For the last 11 years. National Bank has not paid dividend because of the deficit which now stands at KES2bn. On July 31, Parliament authorised a two phase restructuring programme that will see a change in the bank’s strategic partners and a public share floatation.The first phase will involve the sale of 25 per cent of National Security Fund (NSSF) shares to a strategic partner. NSSF controls 48 per cent shareholding in the bank and is part of the bank’s two strategic partners, the other being the government.According to Mr Marambii, the bank needs a strategic partner even after the exit of NSSF so as to strengthen its management and capital base. The second phase of the restructuring programme will see the government sell 17 per cent of its share and 23 per cent of the NSSF share to the public through a floatation in the stock market.

Source: DAIY NEWS