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.
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9 comments
Stewart or Steward????
d. thanks!
who gives a toss?
Steward Bank has done a fair deal to untangle itself from the TN legacy (whatever that was…). They are a tech centric bank with a fresh perceptive (had issues quickly resolved via live chat plus follow up calls – their contact centre really works!).
Regarding profitability, the bank underpins the “$4 billion worth of transactions” monster that is Ecocash. $24 million is a marginal fee to pay given the security and control it brings (given the multiplicity of issues re corporate governance/ethics, liquidity etc bedevilling a number of banks locally). I think that their place within the #EconetMafia is not a short sighted one. Steward could theoretically make losses for a decade and it still wouldn’t halt them, that said, the size and source of such losses will obviously be a concern.
*#EconetMafia is a reference to the size and dominant nature of Zimbabwe’s leading company (pre and post independence). It borrows from #PaypalMafia: http://en.wikipedia.org/wiki/PayPal_Mafia
i love the way you explained it Clint. nice find on #paypalMafia, interesting read.
guys this is banking, u don’t just close branches overnight like that. whats going to happen to customer confidence? remember these are depositor funds in an already not so stable economy, such an abrupt move triggers shock waves in the market. a more gradual approach would have been recommended. technology innovation YES, we will always support that, what of client relationship management? the bank does not even bother informing its clients on such a delicate move and clients have to find out through the press? Really? for a bank?da Running a bank and a telecoms company are 2 different things. at one moment the bank is aggressively luring clients to open accounts then shortly after that its closing branches??? RBZ should get involved here coz there are no clear demarcating lines to show whether this is still a bank or just another Econet monopolizing move. Depositors need to be protected and this has been the trend in this country. right now TRUST bank has depositors funds locked up and nothing is being done about it. Totally agree with you Tendai, absolutely nothing smart about this strategy more of desperately trying to manage poor performance but its going to cost them dearly!
Steward Bank is behaving like Econet. Remember the sudden switch off of EcoCash to upgrade? Just like that one cannot access cash. The cut off of other networks from EcoCash. This shows you the kind of decision making these guys in charge have. No formal comms put out. One day it will back fire
Steward Bank is Econet. Remember?
I’m so startled!