Markets & Finance

NBK sends home 190 employees to tame wage bill

nbk

National Bank branch in Nyeri town. The bank is restructuring as it leverages on technology. Photo/Joseph Kanyi

The National Bank of Kenya (NBK) has sent home 190 employees under the voluntary early retirement scheme as it seeks to rein in its wage bill.

The group concluded its duty at NBK last Wednesday. At the time, the partly State-owned bank had some 1,800 employees.

But the bank did not state clearly on Monday whether or not more employees would go home.

“The bank is happy with the number,” it said in an emailed reply to the question.

Sources had informed the Business Daily that the bank may have paid a two-week salary for each month served to those that accepted the offer. But the lender, without providing the numbers, disputed the figure, only saying the terms had been communicated to the affected workers.

“The terms of the VER which go beyond the salary, were communicated and agreed between the bank and the retirees,” it said.

The restructuring is expected to impact the bank’s half-year performance through the one-off payoff.

National Bank joins other lenders such as KCB and Barclays Bank who have undertaken staff restructuring as they leverage on technology.

Barclays Bank reduced its staff by 272 employees last year in a restructuring exercise that cost it Sh788 million.

Barclays has cut its staff numbers by 1,500 in the last five years. Standard Chartered reduced its workforce by 53 last year.

KCB concluded its staff restructuring last year while Equity announced a hiring freeze with the hope that natural attrition would cut the wage bill.

National Bank chief executive, Munir Ahmed had first announced an employment freeze after taking charge in 2012, saying the lender would only seek talent that would help fill the expertise gaps.

READ: NBK offers workers early retirement to tame wage bill

The move did not bring down the staff costs which at Sh3.7 billion amounted to 44 per cent of the bank’s total income.

National Bank has been struggling to restructure following mismanagement. The first phase of restructuring was conducted by the late Reuben Marambii who recapitalised the bank, saving it from imminent closure.

Mr Marambii retired from the institution in 2012, paving the way for the appointment of Mr Munir who has rebranded the bank and is seeking to push it back up to the league of big players in the industry.

The lender targets to raise Sh11 billion through a rights issue later this year.

National Bank also plans to expand its branch network in the country, without recruiting new staff, and open regional subsidiaries.