Barclays ends staff restructuring plan after 500 job cuts

Barclays Bank of Kenya has ended a three-year staff restructuring plan that has seen it shed nearly 500 jobs.

KCB Group also shed 120 jobs at a cost of Sh1.2 billion as the lender closes a three-year restructuring plan aimed at reducing its wage bill.

The bank in 2010 launched an ambitious plan to trim its workforce by more than 10 per cent to grow profits and curb its wage bill, which was the highest among Kenya’s 44 banks.

Its wage bill dropped from Sh8.4 billion in 2010 to Sh7.3 billion in 2011 before rising to Sh8.1 billion last year.

Barclays, which Thursday reported a 12.7 per cent drop in 2013 profit, follows KCB Group that has also closed its restructuring plan—which started in 2010 and was aimed at cutting nearly  1, 000 jobs.

Barclays Kenya CEO Jeremy Awori said the bank job cuts have ended and that the lender will this year enjoy the benefits of the exercise.

“We have no plans for staff restructuring this year,” Mr Awori told Business Daily in an interview.

The bank had 4,101 employee as at December 2012, and Mr Awori said the number was slightly above 3,000.

Barclays has spent nearly Sh2 billion on the job cuts since 2010. Last year, it shed 170 jobs at a cost of Sh788 million.

The job cuts were informed by the efficiency gains that the bank has made with technology-based service delivery channels such as ATMs, mobile, and Internet banking as well as merger of some departments.

Other banks like Cooperative Bank, Equity and KCB have gone slow on hiring as they bet on agency banking to further grow their reach with least expenditure on people and leasing fees.

The net profit stood at Sh7.62 billion compared to Sh8.74 billion in the same period earlier, weakened by higher costs and provisions for bad loans.

Although Barclays is one of the oldest in the country, its earnings have grown at a slower pace than its rivals in recent years, as its model of focusing on wealthier clients was challenged by home-grown lenders like Equity and Cooperative Bank.

The bank has created an SME unit from its corporate banking unit to increase lending to small and medium businesses.

“We see SMEs as a growth potential and revenue stream moving forward. Historically, we’ve not been playing in the SME field,” Mr Awori said.

Mr Awori said the bank is also seeking to deepen its investment banking as well as venture into bancassurance— where it sells insurance products through its banking halls.

The bank is seeking to adopt the financial supermarket status which includes arranging corporate deals, selling insurance products and offering loans.