Kenya’s ‘Go-To’ Bank
Writer: Matthew Staff
Project Manager: Callum Philp
As Barclays edges towards its centenary in the Kenyan banking domain, the globally renowned business continues to innovate, expand and upgrade as it retains its concerted focus on enriching as much of the country as possible.
As a major global financial services provider, the Barclays name is a household one in the majority of the developed world; spreading its engagement in personal banking, credit cards, corporate and investment banking, and wealth management to more than 50 countries around the globe.
With the vision and purpose of helping “people reach their ambitions”, the culmination of 300 years’ expertise and history continues to generate largely unrivalled levels of service offering and customer satisfaction as the Company continues to “move, lend, invest and protect” money for customers and clients worldwide.
The 140,000-strong global workforce is further testament to the prominence that Barclays has in the industry at large and, for countries like Kenya - which can still be classed in some cases as an emerging market - the benefits that stem from housing such an internationally powerful business is clear for all to see.
With 122 branches at present, and 300 supporting ATMs, Barclays Kenya boasts the biggest network in the country among its peers, with much of its expansion occurring in the past eight years; a 50 percent increase taking place since 2007.
“Barclays Bank of Kenya is one of Kenya’s leading financial solutions providers with a history spanning nearly a century in this market,” the Company emphasises. “The Bank’s mission is to help people achieve their ambitions in the right way in order to prosper and the Bank’s ambition is to be the ‘go-to’ bank for all its stakeholder communities.”
Most prestigious bank
With a history spanning 99 years, the Company has outlined its plans for significant expenditure and further expansion to celebrate its 100-year anniversary, but this certainly isn’t a rare occurrence for Barclays Bank of Kenya who has invested heavily in the country for the entirety of its existence in the country.
With the aforementioned scale of presence bridging urban and rural communities, the 800,000-strong customer base makes Barclays one of the country’s largest banks; a factor compounded and maintained as a consequence of its vast service portfolio.
Covering banking segments across “retail banking, business banking, corporate and investment banking, treasury advisory services and markets, Barclays has furthermore played a pioneering role in the local financial services sector as well as on the socio-economic front”.
Compartmentalising the Barclays offering even further and the range of products and services available to all demographic of customer is just as comprehensive as any western market, standardising the reputable Barclays portfolio across the board where possible.
Inevitably, regional trends and regulations are adhered to throughout this offering, but the core areas living beneath the aforementioned banking umbrellas are all present.
Supporting the staple current and savings accounts is a cast comprising loan options, a mortgage centre, a host of credit card offerings, business banking opportunities, and of course, electronic banking which represents the most rapidly developing of the divisions.
Such rapidly developing elements can take place in a matter of months for companies of Barclays’ size and subsequent flexibility, as the Bank explains: “The first half of this year saw the Bank enhance customer experience through the rollout of new products and enriched digital channel functionalities, installation of new intelligent ATMs and reduced service time at the branches through an improved queue management system.
“As a result, the Bank has received various awards such as the most prestigious Bank in Kenya, best retail Bank in Kenya and best product in Africa (Zidisha).”
Enhancing customer experience
The foundations had already been laid for the positive start to 2015 via a 2014 which saw significant increases across all financial KPIs.
Key highlights for the year included net operating income increasing to KES 28.3 billion against KES 27.9 billion in 2013; a six percent reduction in operating costs as a result of effective cost management; a six percent increase in loans and advances to customers; and the net non-performing loans rate standing at three-five percent as a consequence of strong risk management.
“We have dedicated a significant portion of resources over the past two years towards improving our systems and diversifying our product portfolio in order to provide end-to-end financial solutions and enhance our customer experience,” Barclays Bank of Kenya’s Managing Director, Mr Jeremy Awori said following the results’ unveiling.
Additionally, customer deposits stood at KES 165 billion, a nine percent year-on-year rise, while a strong capital and liquidity position was also maintained. A 10 percent increase in pre-tax profit was reported, amounting to KES 12.3 billion for the year, once again representing a notable increase from KES 11 billion recorded in 2013.
Driving such fiscal development for what is evidently already a market-leading Company is no mean feat and emphasises the scale of capital investments and strategic moves that Barclays involves itself in each year to remain fresh, modern and attractive as a banking proposition in Kenya.
For 2014, this notion also incorporated a host of new products and services to support the future growth of not just the Company itself, but of its customers and partners as well.
“We have introduced new revenue generating streams such as bancassurance, SME, fixed income trading, investment banking and stock brokerage; and revamped existing businesses such as our mortgage offering and asset-based financing to support future growth,” Awori added. “We have managed to keep our cost income ratio stable year-on-year, despite the significant investments which we have made to set up new businesses, rollout new systems, enhance existing technology and acquire key talent.”
Commitment to growth
Moving into 2015 and the Bank has picked up where it left off, making significant investments into a number of new revenue streams in order to build upon the success of recent years and to further capitalise on a population eager to embrace the very latest digital solutions.
The aforementioned mortgage centre and bancassurance has been complemented in the first half of the year with a new Asset Finance Centre of Excellence, as well as an enhanced push into agribusiness as a new revenue stream in order to boost its overall balance sheet growth.
“The launch of the Barclays mortgage centre in the first half of 2015 is already yielding positive results for the Bank,” stated Awori during the Company’s latest quarterly report. “As of June, the value of mortgage applications recorded was almost double what the Bank recorded during the whole of 2014.
“On its part, Bancassurance, although still in its nascence, is showing great promise and we expect that it will be a major contributor of our non-funded income line within the next two-three years.”
“The Bank is also rolling out a robust SME strategy to enable it to play a bigger role in the development of this important sector of the economy,” the report continued. “As a demonstration of its commitment to support the growth of this sector, the Bank has set aside a KES 30 billion kitty to lend to local enterprises.”
A KES 30 billion sum is significant even for a financial entity the size of Barclays, but it emphasises one of the primary facets of the Company’s philosophy; to enrich the lives of people the length and breadth of Kenya.
Complementing its new apps, new service offerings and enterprise support, the Company’s ongoing corporate social responsibility efforts sets the business apart from its market counterparts, involving itself extensively in school and educational programmes as well as in the health sector and all-important rural and farming community.
The Company continued: “Barclays is set to announce a partnership with the Ministry of Devolution and Planning to provide LPO financing to women, youth and persons living with disability.
“The Bank has also set up an agribusiness unit to tap into the significant potential in this space.”
To facilitate such widespread external prominence, as with any large enterprise, the work that goes on behind the scenes to make internal procedures as efficient as possible is of paramount importance. This is no different for Barclays Bank of Kenya who incorporates its own employees’ satisfaction into its wider dedication to the nation’s population.
With more than 3,000 employees distributed across the entire branch network, the importance of standardising hiring, training and retention methods is vital, in order for customers to receive the exact same, high quality service in one corner of Kenya to one in the opposite corner of the country.
To achieve this challenging feat, Barclays adopts both internal and external methods, subsequently bridging the gap between local regulations and considerations, and international standards of service provision.
Internally, staff are promoted from within, often from graduate age, engaging them with the Barclays brand and engraining a loyalty amongst its workforce from day one. Training doesn’t just stop there either, as each member of staff is required to move as quickly with the industry trends as their employers are.
The continuous introduction of new products, services and technologies further demonstrates the necessity for such continuous personnel development, and this is similarly complemented by its external training schemes.
Leveraging the wider Barclays Group is something that each national arm of the organisation is encouraged to partake in, and the Kenyan division is no different as it sends employees overseas or to other offices on the African continent to garner extra skill-sets ahead of internal service unveilings, or to participate in specific training on new technologies set to enter the Kenyan business.
Inevitably and ultimately judged on tangible results, the Bank’s success can be judged upon the influence perceived within Kenya, but is more typically assessed through its yearly fiscal results, which make for equally impressive reading.
In relation to the three month quarter leading into 31 March, 2015, Barclays Bank of Kenya announced a pre-tax profit of KES 3.1 billion, representing a 10 percent growth compared to the same period in 2014.
While the Bank has attributed the positive result largely to a 13 percent growth in interest income, the report released at the end of March alluded to a number of factors that have combined to elevate Barclays’ status even further this year.
The report revealed: “Key highlights for the three month period were: total assets rose by 15 percent to KES 231 billion; net customer assets increased by seven percent to KES 125 billion; there was eight percent growth in customer deposits to KES 156 billion and capital adequacy ratio remained rock solid at 18 percent against a regulatory limit of 14.5 percent.”
Fast-forward to the end of June, and half-year results painted an even rosier picture for Barclays, with reported increases amounting to eight percent in post-tax profit for the entire six month period at the beginning of 2015.
The Company added: “Net profit rose from KES 4.2 billion in June, 2014 to KES 4.6 billion on the back of increased earnings from non-interest income lines. Non-Interest income grew by 12 percent to KES 4.8 billion from KES 4.3 billion, supported by new revenue streams such as bancassurance.
“Total assets grew by 10 percent to KES 235 billion compared to KES 213 billion in the corresponding period in the previous year, while impairments remain well controlled amounting to KES 586 million; 0.9 percent of the average gross advances and underscoring the quality of the asset book.”
Looking forward and Barclays Kenya has every reason to be optimistic about even more concerted future growth, as its new initiatives become increasingly engrained into the Kenyan finance domain.
Awori remains positive and thankful to his team for their ongoing efforts in continuing to make Barclays an ever-developing Bank despite its 100 years of longevity, and has similarly laid out his plans for the remainder of the year.
“Barclays Kenya moves into the second half of 2015 with a continued commitment to strengthen partnership with the Government and entrepreneur ecosystem, strategic customer focus and enhancement of digital channels.
“Looking ahead to 2015, Barclays Bank of Kenya is focused on accelerating its financial momentum in strategic growth segments, most notably in SME and investment banking.
“The bank will also increase its focus on non-funded revenue streams to bolster growth. The launch of the mortgage and asset finance centres of excellence is also expected to enhance our customer experience as we build Kenya’s “Go To” bank.”