NAIROBI, KENYA: Kenya Commercial Bank trimmed its workforce by 709 employees in the 12 months to December last year as it intensified its restructuring geared at cutting costs.
Details contained in the lender’s latest investor presentation covering the financial year ended December 31, 2017, show the group now has 6,483 staff, down from 7,192 as at December 2016.
The drop could be attributed to the restructuring that was announced in April last year. The bank said it targeted to save at least Sh2 billion annually in staff costs.
Restructuring, the bank said, was necessary to align it to an industry whose outlook has been dimmed by legislative and regulatory reforms as well as fast-evolving technology platforms that are now attracting non-traditional players into the financial services sector.
On June 30 this year, the bank is set to close its Kericho East branch, ICD Kibarani branch, and Moi International Airport branch in a move that signals the lender’s bold step in automating most of its services.
Its staff size has been dropping since reaching a high of 7,509 in 2015. This means that between December 2015 and December last year, 1,026 employees have parted ways with the country’s biggest lender by asset base.
In 2013, the group carried out similar restructuring that saw its staff size drop by 1,045. This was at a cost of Sh1.17 billion.
Despite cutting the jobs, the group’s staff costs have been rising since 2012, hitting a high of Sh19.15 billion last year. In 2016, the group had spent Sh17.72 billion on personnel. Last year’s expenditure translates to a Sh1.43 billion rise.
In 2016, KCB said most of its employees were willing to stay. That year, it had 5,880 permanent employees and 1,312 working on contract basis.
“A total of 85 per cent of KCB staff also indicated they intended to stay with the bank for the next 12 months while 77 per cent of staff were totally committed to the institution, making them true champions,“ said KCB in its 2016 annual report.
The 2017 financial performance reflected a cost to income (CTI) ratio of 46.2 per cent, excluding the one-off costs of restructuring that could weaken the ratio. CTI is used by organisations to measure how efficient they are.
Chief Executive Joshua Oigara has said the group was eyeing a CTI ratio of 46 per cent this year as he believed the organisation was past the restructuring phase. In 2015, the group’s CTI was 50.1 per cent.