Cash-strapped National Bank of Kenya (NBK) #ticker:NBK says it will negotiate to ensure that staff do not lose their jobs in the looming takeover by KCB #ticker:KCB.
NBK board chair Mohamed Hassan moved to allay employee and shareholders fears even as they questioned the future of the 1,356 staff currently serving in 80 branches countrywide.
“We are waiting for the offer document. We will negotiate that employees of National Bank are taken care of. They are important to the bank but now it is too early to speculate,” Mr Hassan told shareholders last week.
KCB recently hinted at a leaner workforce with NBK set to undergo further restructuring once the acquisition is completed.
The lender proposed to acquire NBK through a 100 percent share swap of 10 ordinary shares of NBK for every one ordinary share of KCB.
KCB said that part of the takeover will involve streamlining human resource in the post-acquisition period, raising fears of staff-layoffs of NBK employees.
“KCB proposes to maintain NBK as a stand-alone subsidiary of KCB Group post-acquisition … This transitional integration period is necessary to streamline human resources, systems, processes and procedures,” KCB said in a recent circular regarding the transaction.
There are instances when the Competition Authority of Kenya (CAK) has compelled firms to retain staff of target companies for a certain period.
In response to the Business Daily’s queries on whether it would make such a recommendation in NBK's case, CAK declined to comment saying it was yet to receive takeover documents from the two lenders.
“When they present the documents, there are two things we consider: public interest that includes jobs and substantial lessening of competition. But I do not want to be speculative, let us wait for the documents,” CAK director-general Wang'ombe Kariuki said.
The regulator in May approved the Commercial Bank of Africa (CBA) and NIC Group Plc #ticker:NIC merger on condition that they retain their respective staff for at least a year.
The agency in 2014 ordered Britam to retain at least 85 employees of its acquisition target Real Insurance’s 105 staff.