KCB joins growing list of banks to downsize staff

The KCB Group has become the latest banking intuition to downscale its workforce.

The country’s largest bank by assets has seen its 7,500 strong staff contingent pile pressure on its cost of operations.

The decision by the regional bank to lay off employees comes at a time banks are reviewing their business strategies, opting to adopt technology to serve customers.

In a statement to newsrooms, KCB said the decision to lay off was informed by the need to operate more efficiently and meet shareholder expectations.

“The review which is an ongoing process that has seen us re look our workforce has been done in keeping with the best business practice in an industry that is undergoing a major transformation driven by fast evolving technology changes, and a dynamic regulatory regime,” KCB said in a statement.

KCB has operations in Tanzania, South Sudan, Uganda, Rwanda, Burundi as well as a representative office in Ethiopia.

With over 250 branches across the region, the bank is hoping technology will improve performance.

The bank did not immediately say how many employees would be affected by the restructuring program.

Earlier in the month KCB’s Rwanda subsidiary announced it would be letting go of 28 of its employees.

At least six other banks have confirmed plans to significantly cut their wage bill by letting go of employees.

Sidian Bank last year announced it would be letting go of 108 of its employees.

Family Bank, First Community Bank, Standard Chartered Bank and National Bank.

KCB is said to be considering a voluntary early retirement (VER) strategy hoping to get its targeted number.

“The process is being handled in accordance with the law. Further details of the exercise will be provided once it is complete, as the bank is currently in a closed period,” the bank said.

The banking industry was in September last year thrown into a capped interest rate regime that is expected to affect earnings.

Interest rates on loans are caped at four percent of the central bank rate (CBR) while deposits attract an interest of 70 percent of the CBR.

Banks have however reverted to limiting loan issuance.

At its last monetary policy committee meeting, Central Bank of Kenya Governor Dr Patrick Njoroge said the regulator was yet to get conclusive data on the impact the rate cap law had had on the industry.