Business
Leading East African financial institution, Kenya Commercial Bank to implement job layoffs
East African financial institution, the Kenya Commercial Bank has announced another round of layoffs. This comes 2 years after the bank started reducing on staffing costs as it leveraged on technology.
The Kenyan-headquarterd bank, which has operations in Uganda, Tanzania, Rwanda, Burundi and South Sudan said Thursday that this round of layoffs will only affect Kenya and will target staff at all levels.
The CEO of the Kenya Commercial Bank Group, Joshua Oigara, announced the implementation of the layoff program after making changes to the institution’s executive committee structure which has resulted in the creation of two new senior positions of Chief Information Technology officer and Director of Corporate and Regulatory Affairs.
The financial institution has revealed that the layoff program will commence with staff members who will voluntarily apply for early retirement before March 30.
“Staff who will be affected by the review of the organization have an option to be redeployed into other areas of the business or apply for the approved Voluntary Early Retirement (VER) program in the next one month. In addition, the bank will continue to recruit staff with required skills to serve the growing needs of the business,” said Oigara.
The Kenya Commercial Bank has not disclosed or indicated how many people would be affected or how much it intends to spend, or how much it would save after the layoff process is complete.
Kenya Commercial Bank is offering its employees three month’s pay, medical benefits and rebates of up to 25 percent on their loans. They will also receive severance pay of one and half month’s consolidated salary for every year of service up to age 50 and the institution’s human resources department will run a separate workshop for its employees to prepare them for the layoffs.
The institutions’ top level organization structure will now consist of the; Chief Business Officer (Kenya), Chief Financial Officer, Director of Credit, Chief Information Technology Officer, Director Human Resources, Director ofRisk, Director Corporate and Regulatory Affairs and Director of Strategy and all country managing directors will report to the CEO.
Oigara insists the organizational structure changes that the Kenya Commercial Bank are undertaking are necessary in order to place the financial institution in a more competitive position and enable it to focus on its core business.
During the release its results for the nine month period ending September 2012, Kenya Commercial Bank Group’s chairman, Musa Ndeto said that cost to income ratio had dropped to 56.6 percent compared to 62.6 percent over the same period the previous year due to improved efficiencies and cost management initiatives implemented.
The institution, which is set to release its full years earnings posted a 45.67 percent increase in net income which stood at KSh9.37 billion (US$107.7 million) as at September 2012 from KSh6.43 billion (US$73.94 million) as at September 2011.
Kenya Commercial Bank’s share has been one of the best performing this year and had closed at KSh36.50 (US$0.43), having gained 22.69 percent as at the close of trading on Wednesday compared to its closing price of KSh29.75 (US$0.35) on the last day of trading last year.
About Kenya Commercial Bank
The Kenya Commercial Bank is a Kenya-based bank engaged in offering corporate and retail banking services and products. Its offer is targeted at individual customers, as well as at stockbrokers, investment managers and insurance companies. The Bank’s portfolio of products include current accounts, loans, fixed and short term deposits, as well as business investment accounts, among others. The Bank operates through several wholly owned subsidiaries, including Kenya Commercial Finance Co. Ltd, Kenya Ltd, Kenya Commercial Bank Nominees Ltd, Kenya Commercial Bank (Tanzania) Ltd, Kenya Commercial Bank South Sudan Ltd and Kenya Commercial Bank Bank Uganda Ltd.
Source: The East African