Stanbic remains tight-lipped on staff layoffs

Stanbic Group has remained mum on the impending staff layoffs even as its proposed voluntary early retirement (VER) scheme employee submission window closes later on Friday.

The bank which reported a 14 percent growth in earnings for the first six months of the year to Ksh.4.1 billion on Thursday has kept the cards of the expected staff rationalization close to its chest, withholding both the expected costs savings and redundant roles.

According to the lender’s Chief Executive Officer Charles Mudiwa, the expected employee cut aligns with the Group’s strategic growth proposition, aligned largely on the digitization of banking services.

“It’s an outcome of a clear strategy where we are seeking to become more efficient in the business that we run. Some functions will have to be re-organized to make us future ready,” he said.

Stanbic had last month sought to rationalize its permanent and pensionable staff on a voluntary basis while offering short-term compensation including a 25 percent loan discount on outstanding in-house loan balances and free entrepreneurial training.

The looming job cuts has been triggered by the lender’s squeeze on efficiency with the bank seeking to overhaul its brick and mortar assets.

“Branches are being transformed into digital experience centers having already enabled digitized payments on taxes, bills and school fees,” read part of the Group’s commentary in its 2018 full year investor brief.

Tightening efficiencies have seen the Group squeeze out part of its operation costs in a result reflected by the banks cost to income ratio (CIR).

Stanbic’s cost to income ratio at the end of the 2018 financial year slid to 50 percent from 57 percent in the preceding year with costs registering a near flat growth of two percent.

At the same-time, the bank pushed out an additional Ksh.16 billion in customer loans while cutting back on further impairment losses, a further signal to tightening efficiencies.

The bank’s CIR has registered further improvement in the first six months of the year to 47 percent on the back of a reduction to the lender’s share non-performing loans (NPLs) to eight percent and a mild five percent jump in operating expenses.

Employee benefits for the year comprised Ksh.5.9 billion of net expenses in 2018 with salaries and wages reported at Ksh.5.5 billion.

Retirement benefit costs for the year stood at Ksh.403 million with compensation to directors coming in at a lesser Ksh.44.8 million.

According to Stanbic Holdings 2018 Annual report, staff numbers for the year fell by only one post to 1112 with a majority 485 roles sitting at the mid-tiered supervisory segment.

In spite of the looming and considerable slash on jobs, Stanbic bank has insisted on the creation of new jobs including data scientists, engineers and customer data analysts while highlighting on its efforts to retain staff through ups-killing.

“There will be new roles and jobs. VER has been utilized by many companies to right size their organizations. We will be able to put staff in the right areas,” Stanbic Bank Kenya Head of Human Capital Darliah Mbugua told Citizen Digital.

Stanbic Group spent a total of Ksh.61 million in training costs across the 2018 financial year including investments on career growth and international assignments.