The number of employees being laid off by commercial banks continues to pile up with First Community Bank becoming the latest lender to announce that it will be sending home some staff as the effects of the recent interest rates cap continue to manifest.
The Shariah-compliant lender, which has just over 300 employees, said in a statement last week that it would in a fortnight release the list of employees who will be leaving the bank as part of its cost-cutting.
The bank’s chief executive, Fazal Saih, said the staff cuts are partly due to the new law prohibiting lenders from charging customers interest rates of more than four basis points above the Central Bank Rate (CBR).
First Community joins at least two other banks that have recently announced the impending sacking of tens of employees in what is turning out to be an industry-wide strategy to cushion the lenders’ bottom lines from lower interest income.
“We have decided to employ an external firm to review and identify those areas where staff reductions can be made without negatively affecting the bank’s operations,” Mr Saih said in an internal memo to staff.
Sidian Bank, majority-owned by Centum Investments and formerly known as K-Rep, last month announced that it was preparing to sack 108 of its total workforce of 560. Tier-two lender Family Bank has also announced that it plans to lay off an unspecified number of staff.
Equity Bank has also let go of 400 employees in the nine months to September, massive departures which the tier one lender explained as “natural attrition” and not sackings.