The lender which bought Chase Bank three years ago announced a voluntary exit scheme in October and is following up with redundancies after it failed to attain the targeted savings.
At the beginning of the year, the lender had about 900 staff most of who SBM acquired from Chase Bank.
The staff who will be rendered redundant will be given similar terms as those who chose to leave in October including one and a half month salary for every year served.
SBM Bank has sent home a number of employees in a mass layoff after failing to reach their targeted number under the voluntary exit window.
The lender which bought Chase Bank three years ago announced a voluntary exit scheme in October and is following up with redundancies after it failed to attain the targeted savings.
At the beginning of the year, the lender had about 900 staff most of who SBM acquired from Chase Bank.
SBM has not disclosed the number of employees who left voluntarily or the number of staffers it intends to send home but sources within the bank say scores of mid and low-level bankers have received termination letters.
“The voluntary employment separation scheme did not yield the expected result and in line with my earlier communication. The bank will therefore proceed with its redundancy programme,” SBM Ceo Moezz Mir said in an internal memo seen by Business Daily.
The staff who will be rendered redundant will be given similar terms as those who chose to leave in October including one and a half month salary for every year served maintaining staff interest rates on loans for five years.
The workers will also get paid up health insurance for three months and life insurance payments for half a year as well three months break on the principle of their staff loans.
SBM, whose shares trade on the Stock Exchange of Mauritius, first entered the Kenyan market after acquiring bottom-tier lender Fidelity in 2016 at Sh100 before taking over Chase Bank.
Chase Bank collapsed in 2016 with deposits of more than Sh100 billion, part of which was returned to small depositors while it was under the care of the CBK.
The Mauritius bank took over Chase Bank in August 2018 but kept most of the collapsed lenders' employees on its payroll.
The bank closed tens of branches including locations that overlapped and as a strategy for managing operational costs pushing customers to embrace digital banking to cut down on brick and mortar.
The lender, which closed five branches last December, also shut Lavington, Buru Buru and Kimathi Street branches mid this year.
The bank also ceased operations at its express units on Limuru and Ngong roads in Nairobi.
Mergers and acquisitions have led to the retrenchment of workers as companies eliminate duplicating roles and cut costs on extra locations.
Although SBM acquisition was unconditional, the Competition Authority of Kenya has tried to force companies to keep workers for at least a year.
KCB #ticker:KCB which concluded the merger in September 2019 was barred from firing workers for two years to 2021 while NCBA #ticker:NCBA was given 12 months to the end of last year.
Coca-Cola will not be able to fire workers at Almasi until 2022 following the three-year freeze from October 2019.
NCBA laid off hundreds of workers last December following the end of the one-year freeze to sack staff after the merger of CBA and NIC Group.
The lender said it had to cut workers following the impact of the coronavirus pandemic that has cut bank profits.
