Equity Bank ‘shed 392 employees last year’

Equity Bank’s #ticker:EQTY staff count reduced by 5.84 percent last year to 6,318 workers as 392 employees exited the tier-one lender last year.

This brought down the bank’s salary costs marginally by 0.12 percent to Sh11.05 billion last year compared to Sh11.07 billion in 2017 when it had a total staff count of 6,710.

The lender revealed the payroll changes in its annual report, with Equity Group CEO James Mwangi saying no staff were laid off in the period.

“As customers embrace digital and agency banking, which combined as channels manage 97 percent of cash transactions and 92 percent of loan disbursements, there has been no need to replace employees leaving through natural attrition, that is retirement, resignations and sabbatical leave,” Mr Mwangi said in response to Business Daily’s queries.

“We have not had any retrenchments as we chose to retrain and redeploy staff to new areas such as bank assurance, mobile and agency banking as well as merchant and diaspora banking.”

Mr Mwangi had in 2016 reassured staff that the lender’s shift to digital technologies would not result in staff lay-offs as Equity announced a freeze on the opening of new branches and a shift to digital banking services.

Equity Bank maintained its position as Kenya’s second-most-profitable lender as strong growth in income from government securities lifted its net profit by five percent to Sh19.8 billion for the year ending December 2018.

Kenyan lenders have lately faced intense pressure to increase efficiency and reduce costs by embracing digital services to compensate for thinning profit margins caused by new legislation and growing competition.

Citi Global Perspectives & Solutions (GPS) predicted the looming staff cutback in its 2016 report which said that banks were quickly approaching their “automation tipping point,” and could soon reduce headcount by as much as 30 per cent.

A report by Cytonn Investments said the banking sector sent home more than 1,620 employees in 2017 after closing down 39 bank branches in a year.

Equity, according to the survey, topped the list with 400 workers in the period, followed by Barclays Bank which shed 301 employees.

In the period, Standard Chartered Bank of Kenya sent home 300 employees while KCB let go of 223, National Bank 15, First Community Bank 106, Sidian Bank 108 and NIC Bank 32.

Cytonn said in its report that the shedding of staff was necessitated by a tough operating environment brought about by the interest rates capping law and heightened competition.