The concept of responsible banking is gaining credence globally. Describe how your bank is engaged in responsible banking.


As a bank, we have put in place unique framework for ensuring that the bank’s strategy and practices align with United Nation’s responsible banking principles and the global Sustainable Development goals. Islamic banking is inherently and intrinsically founded on responsible banking principles. The bank only invests in businesses that are considered Shariah compliant which locks out sectors like gambling, alcohol, pornography etc. All our financial activities are vetted by the bank’s Board of Directors and the Shariah Supervisory Board to ensure no customer is disadvantaged, a successful governance culture that ensures transparency and accountability. The bank also invests in the community through the Gulf African Bank’s Foundation. The bank, on the basis of humanitarianism, also supports clients in distress through moratoriums amongst other arrangements. We are also the first bank and institution in the country to sign up and champion principle 5 of Women Empowerment Principles (WEPs) successfully committing to adapt gender neutrality in the work place and encouraging other companies to follow suit.




Are you currently using the ESG (Environmental, Social and Governance) factors to measure your sustainability and the social impact of your business?

Yes. These factors are critical in determining the impact we are making as a business through our customer’s enterprises and our community intervention initiatives. Prior to investing in any business, the bank carries out due diligence to determine the risks involved, the environmental and social impact of the enterprise before making a decision. Environmental concerns like impact on climate, social aspects like diversity & human rights and governance all constitute our ESG performance evaluations. This, as well is a key tenet in Islamic finance.

How far are you from fully implementing the Banking Sector Charter?

So far we have implemented almost all items on the banking charter required by the regulator.

How have you responded to your customers banking needs in the wake of the Covid-19 pandemic?

We have restructured deals worth more than Sh9 billion to defer them to a later date. That is just one way through which we have accommodated our customers. Prior approved and undrawn limits are allowed to be drawn and moratorium offered for businesses affected by the pandemic. We are also offering moratoriums on facilities to ease our customer’s cash flow position to meet overheads. The bank is financing businesses that need to bridge their working capital needs and also financing clients whose business have seen a trajectory demand of their product during this time. We have also been appraising clients based on their business turnovers during the pre-covid19 period and the future outlook while offering flexible repayment terms for clients affected by the pandemic amongst numerous other measures


How would you describe your performance in 2019? (one word).


Where did growth come from if any?

Our NFI grew considerably, a payoff following our continued investment in our digital channels. Our FX business also performed considerably well with our trade finance business also recording an upward trajectory.


Overall, how do you rate the quality of your loan portfolio?

Our credit portfolio is healthy. It is underpinned by our prudent risk management framework. We have managed to maintain a low NPL ratio that is within industry levels

What is your average loan size and average loan repayment period?

Our average borrowing sizes vary per sector with the corporate segment averaging Shs120 M, SMEs Ksh 10M and personal consumers Ksh 3M and repayment periods varying per segment and deal as well.


What is the distribution of your credit portfolio by sector, i.e. agriculture, manufacturing, construction, housing, trade and commerce etc.?

We have optimized our credit portfolio along sectors with Trading, real estate, personal consumer, transport and communication, building/construction, manufacturing, energy, tourism/restaurants/hotels and agriculture being our key areas of concentration currently.


How has the Covid-19 pandemic impacted your performance so far and going forward?

We are currently juggling different critical priorities to ensure business continuity as we plan for the future in the face of the current pandemic which has had an impact on our performance. We have had to restructure many deals and deferred payment on some to support our customers. This has definitely affected our income and subsequently performance. However, we are also making sure that we continue lending to the industries that have not been affected adversely currently and going into the future. For example we still have customers who are in the construction sector who have not really been affected by the pandemic and continue meeting our customer’s working capital finance requirements. We are also re-innovating more and ensuring that our digital channels remain open to ensure customers can carry out all their needs from anywhere, at anytime.


How would you describe the performance of your bank over the last 10 years.


Exponential. We have expanded geographically and digitally. Our balance sheet has also remained resilient, recording year on year growth. We have achieved numerous firsts including but not limited to being the first bank to open women only branches, to offer Shariah compliant IPF, first Islamic bank to adopt paperless banking, first bank to launch a Shariah compliant credit card in EA, first Islamic bank to launch infinite banking services amongst numerous other firsts.

What does the year 2020 and the next 10 years portend for your bank?

In 2020, we have been forced to restrategize due to the unprecedented Covid19 pandemic and adapt to the prevailing circumstances. Our focus has been helping our customers to lessen the economic effect of the pandemic on them while still ensuring there is ROI. In the next 10 years, we are looking forwards to making Islamic banking the preferred mode of banking in Kenya. We also have a goal of having attained a strong Tier 1 status during this period, expanding regionally and reaching more customers through our digital channels.

The interest rate capping that has had a major impact on the banking sector has finally been scrapped. What does that mean for your bank and the industry?

The rate cap was repealed in November 2019 after lobbying by sector players. The repeal has led to increased flow of credit to the private sector with credit expansion to banks increasing considerably. This will have a spill over to the overall GDP of the nation. As promised, banks have been very considerate in pricing and have not jacked up prices to make up for perceived ‘lost profits’. As a bank, like other industry players, we are going to lend more to the real economy, especially the SME sector.

How has the removal of the law affected your financial performance so far?

It has had a positive effect on the bank’s performance.

Any new investments or advancements in ICT at the bank?

Yes. We have revamped our internet banking platform GABnet to include more functionalities, making it easy for customers to carry out all their everyday banking needs including but not limited to supplementary account opening, managing internal and external bank transfers, requesting debit and credit cards, payment of employee salaries, making bill payments etc. We have recently rolled out the first Shariah compliant credit card in East Africa and are also venturing into mobile lending.

Does your bank have a mobile money lending platform? What is the loan uptake from the platform and the overall quality of the loans taken?

We are currently venturing into this space.

How is Pesalink’s usage as compared to, EFT, RTGS and other funds transfer methods?

Pesalink is a mobile based platform, as such easy to access for most customers with mobile banking. There has been a growth in the usage of this service amongst this group when compared to EFT and RTGS.

What is the growth trend in the adoption of online and mobile technology in your bank?

We have registered a positive growth in the digital banking space. The trend is expected to grow further as we revamp our platforms and roll out new digital banking solutions.

Any changes on your business model?

We are keen on redefining our customer’s digital experience through mobile and online banking, and increasing our financing portfolio to the agriculture sector

How is the scrapping of interest rate cap going to affect your strategy?

We are going to lend more to the real economy, especially the SME sector.

What is your growth plan, where do you see yourselves in 5 years.

We are looking forwards to making Gulf African Bank a household name in the region and make Islamic banking the preferred mode of banking in Kenya. We also have a goal of having attained a strong Tier 2 status and Tier 1 in 10 years. We are also planning to expand our reach to more counties and in the region while reaching more customers through our digital channels.

How would you describe our macroeconomic environment currently (globally and locally)?

Quasi-stagnant. There is a deep recession – locally and globally- due to the unprecedented Covid19 pandemic. World Bank research indicates that Per capita incomes in most emerging and developing economies will shrink this year. In SSA region for instance, economic activity is on course to contract by 2.8% in 2020. Locally industrial output is low and so is consumption. The contraction in economic activity might slow down, leading to a rebound as more Covid19 containment measures are instituted and economies open up.

What do you see as the biggest threats to Kenya’s banking sector?

Fraud and data breaches that lead to losses are one constant threat that continues to affect the industry. The threat doesn’t have to hit you directly – when one of your vendors is hit, you are also affected as a bank. Banks have also found themselves having to continuously re-innovate as new lending sources emerge. Instances of economic stagnation, which are often unpredictable e.g. the case of Covid19 also affects most bank’s ability to earn. Political risk and uncertainty usually have real consequences on most institutions, the banking industry included.

What are the next growth drivers in Kenya’s banking sector and why do you think so?

As the technological landscape continues to change, banks will have to fuse different technologies into singular platforms that meet customer needs on the go. Continued investments and innovations in the risk sector will be critical in guaranteeing customer’s of the security of their confidential information and money as cyber security risks evolve. The tipping point will come in the form of harnessing artificial intelligence to create customers more personalized financial solutions.


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