Kenyan bank to close S. Sudan branches due to war

May 2, 2017 (JUBA) – Kenya Commercial Bank (KCB), East Africa’s biggest bank by assets, reportedly plans to shut down some of its branches in South Sudan due to the conflict, devaluation of the country’s currency and hyperinflation which has greatly affected the bank.

Operational in South Sudan since 2006, KCB with 19 branches in South Sudan now wants to cut its exposure in Africa’s newest nation where the bank took a KSh3.4 billion hit due to hyperinflation in 2016.

“KCB Group board of directors has approved the temporary closure of some branches in South Sudan, driven by logistical and operational challenges that have made operating some of these branches unsustainable,” a bank official told Business Daily.

Added the bank official, “A change in the economic situation will lead to a re-assessment of the viability of branches.”

Inflation rate in war-torn South Sudan hit 830 per cent in late 2016, and the South Sudanese pound has depreciated against the dollar.

According to the Kenyan bank, the planned closure of branches in South Sudan will lead to job losses as many workers will be affected.

“Naturally, any branch closures will lead to staff re-assessment but, as mentioned earlier, this is work in progress and we cannot therefore, at this time, quantify the number of staff who will be affected,” the bank said.

In January 2014, KCB shut three branches in the towns of Bor, Bentiu and Malakal, due to the violent conflict that hit the East African nation.

(ST)