Barclays Bank of Kenya managing director Jeremy Awori. The bank’s
redundancy programme increased its staff costs by four per cent. file
photo | nmg
Summary
- Barclays Bank Kenya closed last year with 2,268 employees on its payroll, down from 2,591 in 2016.
- Most of the staff exited as part of a Sh500 million restructuring that saw the business shut down 12 branches to close the year at 89 outlets, most of them in Nairobi.
- Banks have sent home hundreds of staff following the interest rate capping law.
Up to 323 staff of Barclays Bank Kenya left
employment last year, the lender has revealed, as it announced a 6.4 per
cent drop in full-year net profit to Sh6.9 billion.
Barclays closed last year with 2,268 employees on its payroll, down from 2,591 in 2016.
The
bank says most of the staff exited as part of a Sh500 million
restructuring that saw the business shut down 12 branches to close the
year at 89 outlets, most of them in Nairobi.
The Sh500
million drop in net profit compared to Sh7.4 billion posted in 2016 was
mainly attributed to the interest rate capping law, which hit its
interest income.
“During the year, we had to make a couple of tough and unpopular
decisions in order to simplify the organisation amidst a tough working
environment,” said Barclays Kenya chief executive Jeremy Awori during a
media briefing on Thursday.
“We closed several
branches, which were too close to each other and giving sub-optimal
returns. We also reduced our headcount by 12 per cent.”
He
added that the business has in the past two months completed a “small”
voluntary early retirement (VER), but did not disclose how many
employees were affected or the cost of the layoffs.
Banks have sent home hundreds of staff following the interest rate capping law.
The Barclays redundancy payoff resulted in a four per cent increase in staff costs to Sh10.11 billion last year.
Barclays,
the first Kenyan bank to announce its full-year results, saw its
interest income, including loans to customers and government securities,
dip 3.4 per cent to Sh27.2 billion.
Non-interest
income, which comprises fees and commissions, dividend income and
foreign exchange income, also dropped Sh892 million to close the
financial year at Sh8.5 billion.
The tier one lender
closed the year with a loan book of Sh168.4 billion (similar to the
previous year) while customer deposits increased 4.4 per cent to Sh186
billion.
The extended electioneering period last year
saw some of the bank’s key corporate clients hold back on drawing down
on approved facilities due to political jitters.
“We are seeing these customers come back to draw down on their facilities. The confidence is back,” said Mr Awori.
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