Bank of Africa Group (BOA Group) has made a KSh 1.5 billion capital injection into its Kenyan subsidiary to support its growth strategy.
According to BOA Group, this is in support of BOA Kenya’s ‘change of strategy from defensive to offensive’.
BOA Kenya which provides banking services to corporate, SME and retail clientele, has been reorganizing its business over the past four years with an aim of having a leaner balance sheet, improved asset quality and diversified liability mix supporting of efficient liquidity management.
Its defensive strategy includes the consolidation of its business and rationalization of branch network given development and advancement in digital technology in driving banking business.
The strategy necessitated shrinking the balance sheet for optimal capital management as the Bank refocused on its areas of strength, improving operational efficiency and enhancing the level of technological adoption.
Key among the performance levers has been working with several customers on debt restructuring with the objective of rehabilitating such non-performing debtors to support their business continuity amidst the market disruptions and economic slowdown in key sectors.
“The prolonged difficult economic environment has affected a magnitude of businesses, some of whom are our customers, and as a result, some firms have struggled to manage operational costs and financial obligations. We have therefore had to take significant provisions in 2019 to cover the risk on these non-performing clients,” said BOA Kenya Managing Director, Mr. Ronald Marambii.
Mr. Marambii further stated that following years of reorganizing, the bank was now on a better base from which to grow and with the approved capitalization, should be able to embark on an offensive strategy.
BOA Kenya is also working on increasing regional trade aimed at key corridors where the BOA Group has Banking subsidiaries and will be aiming at enhancing operational efficiencies in transfers and cash collections for companies operating across the region.
“Kenya as a country hosts the IT infrastructure for the whole BOA group, and BOA Kenya intends to fully harness this group resource and churn out appropriate digital solutions to enhance customer efficiencies and service experience,” explained Mr. Marambii.
BOA Kenya is a subsidiary of Bank of Africa Group — part of BMCE Bank of Africa Group — which has operations in 20 African countries and 30 others worldwide.