DTB to close 6 branches to reduce operating costs
Diamond Trust Bank (DTB) CEO Nasim Devji during the lender's Annual General Meeting (AGM) at Laico Regency Hotel in Nairobi on May 25, 2017.
What you need to know:
- The lender said the branches targeted for closure are those close to others, which will be merged with the primary ones in their respective areas.
Diamond Trust Bank Kenya (DTB) is set to close six of its branches as it seeks to reduce its rising operational costs.
In a notice on Friday, the lender said the branches targeted for closure are those close to others, which will be merged with the primary ones in their respective areas.
The Jamhuri Street branch in Malindi will be taken over by the Malindi branch while the Oval Digital Lobby and 9 West branches in Westlands will be merged with the Westgate branch. The Kago Street branch in Eldoret will be taken over by the Eldoret branch.
The branches will officially be closed on June 30.
Central Bank approved
The branch at the Garden City Mall, where the loss of anchor tenant Shoprite led to reduced foot-traffic, will be taken over by the Thika Road Mall branch from September 30.
The Eastleigh branch will be merged with the Medina Mall branch from October 30.
“The Central Bank of Kenya has approved an application by Diamond Trust Bank to consolidate its branches in certain locations within the country. The branch consolidation will affect locations where the branches identified for merger are co-located or in close proximity to each other,” DTB said.
“The staff in the affected branches will be redeployed appropriately to support other branches or business units within our network,” the bank said.
Rising costs
This comes after a fall in the lender's shareholders’ return on equity from 13 per cent in 2018 to 12 per cent in 2019.
Non-performing loans increased from Sh12.1 billion to Sh13.6 billion in the same period while the cost to income ratio rose from 43.9 per cent in 2018 to 46.5 per cent in 2019, highlighting a rise in operating costs.
DTB, which is banking on technology to reduce expenses, issued a profit warning last December as its earnings after tax to September fell 28 per cent to Sh4 billion.
It set aside Sh2.8 billion to cover bad loans, a 232 per cent spike from the Sh870 million it set aside for the same purpose the previous year.
