STANCHART BANK SENDS A SHOCKING MORNING MESSAGE

Standard Chartered Bank Kenya last year spent Sh209.96 million on redundancies, marking the eighth straight year of trimming its workforce amid an increased switch to digital banking.

The lender discloses in its latest annual report that its workforce dropped by 59 to 1,061 in the year it booked Sh209.96 million as redundancy costs, compared with Sh214.07 million in 2021.

The latest staff numbers mean that StanChart has now shed 987 jobs in the last eight years, resulting in a 48 percent drop in the workforce from the peak of 2,048 at the end of December 2014.

Ten-year low

In 2021, the lender cut 160 jobs, while the layoffs in 2020 and 2019 stood at 117 and 170, respectively.

The retrenchments have been implemented as StanChart’s net income rose from a 10-year low of Sh5.44 billion in 2020 to Sh9.04 billion in 2021 and a record Sh12.06 billion last year.

The redundancies have cost the lender an aggregate of Sh3.88 billion in the last eight years amid increased digitalisation of services and branch rationalisation.

StanChart last raised its headcount in 2014, when the staff numbers rose by 198 from 1,850 to 2,048 in the year net profit jumped 12.7 percent to Sh10.4 billion.

Staff costs rose last year by 7.8 percent to Sh7.04 billion despite the fall in headcount, partly on salary increments and redundancy costs. Staff costs hit a high of Sh7.86 billion in 2020.

The bank’s committee in charge of board nomination, evaluation and remuneration of employees, says it “reviewed the annual increases for staff salaries and variable compensation awards” for eligible staff.

“The committee believes that it was appropriate to make these awards to those that contributed to the continued success of the company,” says the committee in the annual report.

StanChart has closed scores of branches over the past decade, saying it will now prioritise locations with significant traffic as it seeks to grow its retail client base.

The bank had 42 branches in 2016 but the number dropped to 33 in 2019 before a further drop in 2020 when StanChart closed eight branches as Covid-19 pandemic disruptions fuelled an increased switch to digital channels.

Online banking

Queues in banking halls have been declining, putting at risk customer-facing jobs such as tellers as lenders continue to respond to a significant shift in transaction preference.

StanChart says 97 percent of its transactions are now outside branches.

“We continue to strategically and purposefully migrate client and product acquisition, servicing, investing, and transacting through our SC Mobile and online banking channels,” said the lender.

The onset of the pandemic in March 2020 accelerated the fall in branch activities as people sought alternative channels such as mobile and online banking to lower the risk of contracting the Covid-19 virus.

Sourced from. Business Daily