NAIROBI, KENYA: A new report released by Cytonn reveals that Equity Bank lost the highest number of staff at 400 workers followed by Barclay Bank at 301 and Standard Chartered at 300 employees.
The country’s biggest lender by assets Kenya commercial Bank bled 223 employees while Bank of Africe closed the most branches at 12 locations.
Banks took advantage of the rate cap law to declare a crisis and opted to send workers home to manage costs.
The layoffs have however come with cost of restructuring including severance packages for early staff retirement.
“We expect to see a short term spike in cost to income ratios as result of managements’ tough decisions on staff rationalization, branch closures and investments in technology. Going forward, these actions will trim the excess fat, making banks leaner and more efficient to face the future,” Standard Investment Bank said.
Most employees have now been replaced by agents working directly from banking halls and focusing on mobile banking channels.
According to Cytonn, about 93 new bank branches were opened last year despite massive layoffs, migration to mobile based technologies and shift to agency models.
This year alone, National Bank has opened two new branch in Nandi Hills and in Kitale as it targets the expanding agribusiness sector while NIC Bank has opened four new branches in Malindi, Watamu, Kilifi and Diani.
According to Investment firm Cytonn, with 39 branch closures over 1620 bank employees lost their jobs last year in one an effort to contain costs while taking advantage of disruptions by the rate cap.
“With rising operating expenses in the sector, and the expected reduced margins owing to the enactment of the Banking (Amendment) Act, 2015, 11 banks announced plans to downsize, close to 1,620 bank employees were laid off, and 39 branches closed, but the total number of branches in the sector rose to 1,182 in FY’2017 from 1,089 in FY’2016,” Cytonn said on Monday.
The investment firms numbers were modes as it could not establish how many workers left some of the lenders.
Cytonn said that struggling Family bank’s employees who left remains unspecified. However, the lender let go 100 staff in December 2016 and a further 150 in December 2017.
Banks had employed 28,009 employees as at August 2016 but the bloodletting had left 26,076 employees by June 2017.
According to the banking sector lobby, Kenya Bankers Association (KBA) its members had cut 1,933 jobs between August 2016 at the end of June this year, attributing this to the adjustment to the reality of the rate cap.