More than 1,620 employees were retrenched by lenders listed on the Nairobi bourse in the last year, a report on the financial sector says.
According to a study by Cytonn Investments, the staff were retrenched following closure of 39 bank branches across the country during the 2017 financial year.
Among lenders that disclosed the number of employees sacked, Equity Group #ticker:EQTY led with 400 retrenchments while Barclays Bank #ticker:BBK let go of 301 staff.
Standard Chartered Bank of Kenya #ticker:SCBK retrenched 300 employees and KCB Group #ticker:KCB 223.
Others are National Bank #ticker:NBK (150), First Community Bank (106), Sidian Bank (108) and NIC Bank #ticker:NIC (32).
The report shows that over 39 bank branches were closed across the country within that period.
The figures could be higher since data was unavailable from some of the banks affected.
Tough business environment
According to Cytonn, shedding of staff was necessitated by a tough operating environment brought about by the interest rates capping law.
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In a meeting held on March 19, the Central bank's Monetary Policy Committee decided to reduce the CBR to 9.5 per cent from 10 per cent.
“The focus for the banking sector in 2017 was on adjusting business models to conform to the Banking (Amendment) Act 2015. To this effect, banks took proactive measures aimed at increasing operational efficiency in response to the challenging operating environment, such as laying off staff, closure of branches, reviewing operating hours for some branches, or outright sales in the case of struggling Tier III banks,” the report says.
There has been pressure from industry players and the IMF for the law to be scrapped.
Recently, after a three-week visit to Kenya, the International Monetary Fund team leader Benedict Clements disclosed that the government had expressed its commitment to scrap it.
However, this has drawn resistance from a section of legislators and the Consumer Federation of Kenya (Cofek) who say the move would be counterproductive to Kenyans.