Standard Chartered Bank Kenya #ticker:SCBK terminated 285 employees last year at a cost of Sh173.1 million, marking the third consecutive staff cuts for the lender in as many years.
The bank disclosed the job cuts in its latest annual report, emphasising its strategy of entrenching use of technology to boost efficiency across its operations.
“The bank’s organisational transformation journey which started back in 2015 continued into 2017, as we prioritised productivity and effectiveness in the business,” StanChart said in the report.
“Through the transformation we had a headcount decrease from 1,872 in 2016 to 1,587 staff as at end of December 2017.”
The latest layoffs add to some 100 employees retrenched in 2016 and 167 in 2015, with the bank spending more than Sh700 million to send home the workers in the three years.
StanChart last year closed four branches — in Bungoma, Kisii, Kitengela and Warwick (Nairobi) — as it reviewed its brick-and-mortar network and intensified its drive to digital banking channels.
“2017 was also critical to the bank as we entered the second year of implementing our renewed strategy aimed at being a leaner and more efficient bank, a simpler client-focused organisation and a digitally driven bank with a human touch,” the lender said.
StanChart’s cost-to-income ratio, a measure of efficiency, improved marginally to 48 per cent last year from 48.5 per cent in 2016.
The bank’s goal is to migrate over 80 per cent of transactions to non-branch channels by 2020.
It has invested heavily in the Internet, mobile and video banking besides rolling out cash deposit machines.
Kenyan banks’ efforts to cut costs by expanding their digital banking services gained momentum in the wake of interest rate controls that has significantly thinned margins from the core lending business.
KCB #ticker:KCB, for instance, says its non-branch transactions currently stand at more than 85 per cent of the total volumes.
The lenders have invested billions of shillings in ICT platforms that power their agency, mobile and Internet banking services. This has allowed them to grow their customer base without a significant increase in new branch openings as was the case in the past.