Up to 323 staff of Barclays Bank Kenya #ticker:BBK left employment last year, the lender has revealed, as it announced a 6.4 per cent drop in full-year net profit to Sh6.9 billion.
Barclays closed last year with 2,268 employees on its payroll, down from 2,591 in 2016.
The bank says most of the staff exited as part of a Sh500 million restructuring that saw the business shut down 12 branches to close the year at 89 outlets, most of them in Nairobi.
The Sh500 million drop in net profit compared to Sh7.4 billion posted in 2016 was mainly attributed to the interest rate capping law, which hit its interest income.
“During the year, we had to make a couple of tough and unpopular decisions in order to simplify the organisation amidst a tough working environment,” said Barclays Kenya chief executive Jeremy Awori during a media briefing on Thursday.
“We closed several branches, which were too close to each other and giving sub-optimal returns. We also reduced our headcount by 12 per cent.”
He added that the business has in the past two months completed a “small” voluntary early retirement (VER), but did not disclose how many employees were affected or the cost of the layoffs.
Banks have sent home hundreds of staff following the interest rate capping law.
The Barclays redundancy payoff resulted in a four per cent increase in staff costs to Sh10.11 billion last year.
Barclays, the first Kenyan bank to announce its full-year results, saw its interest income, including loans to customers and government securities, dip 3.4 per cent to Sh27.2 billion.
Non-interest income, which comprises fees and commissions, dividend income and foreign exchange income, also dropped Sh892 million to close the financial year at Sh8.5 billion.
The tier one lender closed the year with a loan book of Sh168.4 billion (similar to the previous year) while customer deposits increased 4.4 per cent to Sh186 billion.
The extended electioneering period last year saw some of the bank’s key corporate clients hold back on drawing down on approved facilities due to political jitters.
“We are seeing these customers come back to draw down on their facilities. The confidence is back,” said Mr Awori.