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Corporate

Sidian Bank to layoff 108 staff in cost-cutting plan

Sidian Bank, majority owned by investment firm Centum, has announced a new voluntary retirement plan targeting 108 staff as it moves to trim its payroll.

The retrenchment will cost the three-tier bank Sh70 million, chief executive Titus Karanja said Monday at a media briefing.

Mr Karanja said the retrenchment was not necessitated by the recent law capping interest rates, adding that the lender had planned the move before the legislation was passed.

The new law prohibits banks from charging customers interest rates of more than four percentage points above the Central Bank Rate.

"Price is no longer a distinction under the interest rate caps regime. It is now about efficiency," said Mr Karanja.

Sidian Bank reported a 27.5 per cent drop in net profit in the year ended December weighed by higher interest expenses.

The new law capping borrowing rates is expected to eat into wide margins previously enjoyed by Kenyan banks.

Family Bank recently announced a similar plan to shed an unspecified number of workers off its payroll.

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