StanChart Kenya lays off 167 as parent firm orders cost-cutting

Standard Chartered Bank Kenya let go about 167 employees last year in a restructuring plan that was initiated by its London-based parent company.

The Nairobi Securities Exchange (NSE)-listed firm disclosed the job cuts in its latest annual report, noting that its staff count has fallen to 1,881 from the previous 2,048.

Those who left include five executives who were replaced or had their jobs merged with other roles, a move that saw the executive committee membership fall to 13 from the previous 15.

StanChart said the redundancies partly contributed to its staff costs rising by Sh451 million to Sh6.2 billion in the year ended December.

The bank says the new structure resulted in three divisions which it is focusing on –corporate & institutional banking, commercial banking and retail banking which now has a division head.

“The strategic review will see us invest in our core strengths, and where we have or will have a competitive advantage,” StanChart said in the annual report, adding that it will tighten its risk measurements and cut costs by investing in technology. The company will also enhance its retail digital infrastructure to attract and retain customers.

Stanchart hired David Idoru, formerly an executive at StanChart Singapore and who has also held a senior role at the multinational’s East Africa operations, to head its retail banking unit.

The bank will be seeking to expand in a segment currently dominated by Equity Group, Co-op Bank and KCB Group. The changes are expected to reduce costs, increase efficiencies and lead to growth in the lender’s operations.

READ: StanChart stock slides at NSE as it goes ex-dividend

StanChart’s key management compensation, for instance, dropped to Sh379.6 million in the year ended December compared to Sh397.9 million a year earlier following the departure of five executives.

The job cuts saw the exit of 42 unionisable employees, with the staff number in that employment category falling to 391.The ranks of “other” staff dropped the most to 242 from the previous 411 while the total management employees increased to 1,248 from 1,204.

StanChart’s job cuts came after its London-based parent Standard Chartered Plc announced it would eliminate 15,000 jobs worldwide by 2018.

The retrenchments at the local unit follow a trend by Kenyan lenders seeking to contain ballooning staff costs by turning to technology.

StanChart’s staff costs have more than doubled over the last six years to hit Sh6.2 billion as at December 2015 from Sh2.8 billion at the end of 2009.

Despite this, the bank remains one of the most efficient institutions with the layoffs set to further reduce its operating costs. Its cost-to-income ratio stood at 45 per cent last year, one of the lowest in industry.

Of the listed banks, only DTB and NIC had better ratios at 41 per cent and 41.6 per cent respectively in the same period.

Besides automation of services –which has reduced the need for some roles— banks are increasingly looking to maintain low operating costs by reducing their staff count across various ranks.

The retrenchment at StanChart partly contributed to its net profit dropping 39 per cent to Sh6.3 billion last year.

The bank also took a hit from a rise in bad debts and the absence of one-off gains from sale of property the year before.