This archive report was first published on 9 August 2019.
Stanbic Bank's proposed voluntary early retirement (VER) scheme employee submission window closed on Friday, but the bank has remained mum on the impending staff layoffs.
According to the bank's Chief Executive Officer, Charles Mudiwa, the expected employee cut aligns with the Group's strategic growth proposition, largely based 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," Mudiwa said.
Stanbic Bank has been seeking to rationalize its permanent and pensionable staff on a voluntary basis, offering short-term compensation including a 25 percent loan discount on outstanding in-house loan balances and free entrepreneurial training.
However, the looming job cuts have 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," the bank's commentary in its 2018 full year investor brief read.
Stanbic Bank's cost to income ratio (CIR) has registered further improvement in the first six months of the year to 47 percent, on the back of a reduction in 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.
Despite the looming job cuts, Stanbic Bank has insisted on the creation of new jobs, including data scientists, engineers, and customer data analysts, while highlighting its efforts to retain staff through upskilling.
"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.
