NCBA Group #ticker:NCBA spent Sh700.7 million to cut its workforce in the year ended December as the lender sought to realise the cost-reduction benefits of the merger of its constituents –the former NIC Group and CBA Group.
The Nairobi Securities Exchange-listed firm says the job cuts were implemented in Kenya –its biggest market.
Its total staff count dropped to 2,392 in the review period from 2,598 the year before.
“We restructured the Kenya businesses to create a leaner target operating model that can deliver on our strategic ambitions,” chief executive John Gachora says in the bank’s latest annual report.
“As part of this process, we executed a voluntary exit programme for employees who wished to consider opportunities outside the organization. Through this process, a number of our senior executives elected to leave the organization.”
Those who retired from NCBA in the review period included former executive director Jeremy Ngunze.
Besides reducing its workforce, the bank also closed excess branches in several locations.
“In June 2020, we rationalised our branch network in Kenya. The rationalisation saw 14 branches that were colocated or in close proximity merged into one of the selected branches,” Mr Gachora said.
“The staff members of the affected branches were redeployed across the bank’s network and business units.”
NCBA is among the major banks that spent hundreds of millions of shillings last year on staff restructuring amid reduced profitability and increased investments in digital banking infrastructure.
Standard Chartered Bank of Kenya #ticker:SCBK laid off 200 employees at a cost of Sh1.35 billion while Absa Bank Kenya #ticker:ABSA spent Sh1 billion in an exercise that saw its workforce drop by more than 150.The job cuts came amid reduced profitability in the Covid-19 pandemic era which increased defaults. Banks further contended with increased provisions for the bad debt, suspension of charges on mobile banking transactions and accommodation of borrowers including repayment holidays.NCBA reported a 73.8 percent jump in net earnings in the first quarter ended March, helped by higher interest income and lower provisions for bad loans.The lender’s net profit stood at Sh2.8 billion in the review period compared to Sh1.6 billion a year earlier.It marks the highest profit growth among the listed banks and is followed by Equity Bank’s #ticker:EQTY 63 percent earnings jump to Sh8.6 billion in the same period.NCBA’s provision for defaults declined by Sh1.1 billion to Sh2.6 billion despite non-performing loans rising by Sh722.3 million to Sh39.5 billion.Interest income from loans and investment in government […]