The Herald yesterday reported that Steward Bank is closing 8 branches and consequently retrenching scores of employees. The Herald report does not give an indication of the timelines nor any official comment from Steward Bank and I am afraid that’s still the way it is.
Our unofficial sources close to the bank collaborate the explanation given in the Herald report concerning the branch closure and retrenchments. Our sources say the bank will be doing away with the brick and mortar model in none-core centers around the country hence the closure of branches.
According to our sources, the strategic reasoning behind this is that clients in these none-core centers are mainly consumer clients who can easily access the bank’s service via EcoCashSave – a service that Steward Bank is also paying agents for. Business clients (those who can’t use EcoCashSave) will still be able to access Steward Bank services through the main centers.
This explanation is plausible especially considering that Econet purchased TN Bank (now Steward Bank) as a strategic move to allow them to be fully in control of EcoCash, through the newly acquired banking license.
In recent months, Stewart Bank adverts have been increasingly pushing this banking without walls mantra and so far it makes sense to do that.
Why keep rental and salary overheads when the bank already has agents on the ground to manage tasks that take place within the branches?
During the EcoCashLoans launch event, a high ranking official at Steward Bank told me that the EcoCashSave books were moving $20 million monthly. Add to this their backing from Econet, you’d think it’s all two gunzy for Steward Bank and the branch closures are nothing more than a forward thinking strategic move towards a “wall-less” Steward Bank.
However, it’s not all rosy at Steward Bank. Last year the bank reported an astonishing half year operating loss of$24 million and our sources in the industry have suggested there’s no sign Steward Bank is out of the woods yet.
We also know from that August 2013 report that Steward Bank had “acquired new sites for its re-branded branches” and these were expected to “come on stream gradually until the end of 2014”. Why the sudden shift towards the opposite? Surely by then, EcoCashSave was already in the works and informing strategy.
This would suggest that the plan had always been to grow both the brick and mortar side together with the mobile, wall less unit and the claimed emphasis on mobile banking is new and a response to urgent, financial pressures.
Certainly, the media blackout is fueling speculation that the retrenchments and branch closures have something to do with poor performance more than smart strategies.