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Barclays Bank staffing down 171 as rates cap bites

Barclays Chief Executive Jeremy Awori. FILE PHOTO | NMG
Barclays Chief Executive Jeremy Awori. FILE PHOTO | NMG 

Barclays Bank of Kenya’s #ticker:BBK staff count dropped by 171 workers last year, joining a long list of lenders that have either retrenched or failed to replace retiring employees in the wake of interest rates cap law.

The lender had 2,591 employees in Kenya as at December 2016 compared to 2,762 workers a year earlier, according to the bank’s latest annual report. Staff costs at Barclays Bank grew 4.99 per cent to Sh9.77 billion last year compared to Sh9.3 billion in 2015.

“With the announcement of the Barclays Plc sell-down in Barclays Africa Group Ltd (BAGL) and the introduction of interest rate caps, many employees were concerned about their future at the bank,” the bank says in the 2016 annual report.

KCB Group #ticker:KCB , Kenya’s biggest lender by assets, reported that 223 employees left the bank last year, which saw the bank incur a Sh186 million bill in staff restructuring costs. The bank has announced another round of layoffs this year.

Nearly a dozen Kenyan banks including StanChart #ticker:SCBK , Bank of Africa, Sidian, Family Bank, First Community Bank, NIC #ticker:NIC , and Ecobank have turned to job cuts as a strategy to trim costs as the new law capping interest rates has eaten into banks’ margins.

Barclays Africa, which is listed on the Johannesburg Stock Exchange, owns a 68.5 per cent stake in Barclays Kenya.

The bank’s employee headcount stood at 3,072 in 2012 and has steadily been shrinking over the years, as the lender turns to digital technology to automate operations and cut costs. “The financial services industry is becoming increasingly competitive with more reliance on technology and innovation as key differentiators for service delivery,” says Barclays.

Barclays Kenya in 2004 ended a three-year staff retrenchment which trimmed the bank’s workforce by about 420 employees at a cost of Sh1.7 billion.

Full-year after-tax earnings dropped to Sh7.39 billion in December 2016 from Sh8.4 billion in 2015, which Barclays blamed on a “challenging operating environment with significant regulatory changes”.

The job cuts have seen Barclays Kenya’s cost to income ratio remain at 53 per cent last tear – same as 2015 - compared to 56 per cent in 2013.

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