StanChart spends Sh1.35bn to lay off staff in Covid year


A StanChart bank branch in Nairobi. PHOTO | NMG

Standard Chartered Bank of Kenya #ticker:SCBK last year spent Sh1.35 billion to lay off 200 staff amid decade-low profits in coronavirus environment that increased loan defaults in the banking sector.

The latest redundancy costs are nearly five times the Sh289 million incurred a year earlier, marking the seventh straight year of the Nairobi Securities Exchange-listed lender to cut staff numbers.

StanChart in November said it was going to lay off 200 employees, citing the need to eliminate some roles in line with its digital transformation strategy that started in 2016.

The redundancy drove up employee costs for the year by six per cent to Sh7.86 billion.

The bank closed the year with 1,280 employees—a 117 drop from the previous year— highlighting the impact of continued job cuts as the lender deepens focus on digital banking.

The redundancies coincided with the decision to close eight branches last May on the back of Covid-19 which had reduced business activities and also pushed many customers to digital platforms such as mobile banking.

The lender’s net profit declined to Sh5.44 billion from Sh8.24 billion posted a year earlier, being the lowest since 2010 when it returned a net profit of Sh5.37 billion.

StanChart has in the last seven years spent Sh2.11 billion on redundancies with staff numbers having dropped by 768 in this period. It had 2,048 employees in 2014.

The bank had 42 branches in 2016 but the number has come down to below the 33 it had in 2019.

StanChart last year for instance shut down T-Mall, Moi Avenue, Two Rivers and Upper Hill branches in Nairobi and directed customers to nearby branches.

Chief financial officer at StanChart Chemutai Murgor said in March that footfall in branches has been falling for the last three years in line with the growing preference for non-branch alternatives such as mobile banking.

“Our footfall has fallen on average by 47 per cent,” said Ms Murgor.

Queues in banking halls have been on decline, putting at risk customer-facing jobs such as tellers as lenders continue to responding to a significant shift in transaction preference.