KCB Group CEO Joshua Oigara. FILE PHOTO | NMG The Competition Authority of Kenya (CAK) has ordered KCB Group #ticker:KCB to retain at least 90 percent of the employees it will have once it completes its buyout of National Bank of Kenya #ticker:NBK, with the jobs protection to last for one-and-a-half years.
The country’s biggest bank by assets had said it would move swiftly to eliminate excess staff and branches in a bid to accelerate returns from the all-stock acquisition.
The regulator, which is entrenching job protections in mergers and acquisitions, has now offered majority of the employees of the merged outfit temporary reprieve.
“In order to strike a balance between addressing the public interest concerns and accommodating the strategic intent of the merging parties, the Authority was of the view that granting a conditional approval to the proposed transaction would be appropriate,” the regulator said in a statement
KCB has 4,835 employees in Kenya while NBK’s workforce currently stands at 1,356, the regulator said. Despite the regulatory constraint, KCB can still lay off 619 workers or 10 percent of the total staff count of 6,191.
The CAK said it approved the buyout partly because KCB will be in a position to support NBK whose performance has deteriorated over the years, with the lender breaching the minimum capital adequacy ratios.
Besides the KCB/NBK merger, the tie-up of NIC Group and CBA Group is also expected to result in significant job losses.