- The employees were given terms of the voluntary retirement plan about two weeks ago, with the lender citing digitisation as the major reason for the job cuts.
- All permanent and pensionable employees of the bank are eligible for the plan, as per terms of the redundancy scheme seen by the Business Daily.
Up to 200 employees of Stanbic Bank are facing layoffs under an early retirement scheme intended to cut payroll costs for the lender.
The employees were given terms of the voluntary retirement plan about two weeks ago, with the lender citing digitisation as the major reason for the job cuts.
All permanent and pensionable employees of the bank are eligible for the plan, as per terms of the redundancy scheme seen by the Business Daily.
The early retirement plan presented to the staff shows that those taking up the severance option will get an "ex-gratia payment calculated at the rate of 1.5 month’s salary for each completed year of service in recognition of the service rendered to the bank by the employee."
This is in addition to the pay in lieu of notice and compensation for unused leave days.
The lender has also offered employees signing up for the layoff plan a 25 per cent rebate or discount on the balance of any outstanding staff loans settled immediately upon exit.
The exiting employees will continue repaying their loans on staff interest rates for a period of six months, after which the outstanding amounts will revert to commercial terms.
They will also be allowed to remain on the bank’s medical scheme until the end of the year, with an option of opting out and getting paid the equivalent of the cost of the insurance to the bank.
Stanbic had not responded to Business Daily queries on further details of the early retirement plan including the cost to the bank by the time of going to press.
Companies ordinarily offer employees the early retirement option with an eye on long-term cost savings, which is reflected in subsequent years’ financials.
Stanbic Bank’s employee costs rose by three percent in 2018 to Sh5.595 billion. In the first quarter of the year however, the lender cut its staff costs by 5.3 percent to Sh1.417 billion compared to a similar period last year.
Total operating costs rose by 25 percent in the first quarter to Sh3.55 billion, from Sh2.85 billion in quarter one of 2018.
The bank has been reporting strong profit growth in the past two reporting cycles, on the back of higher interest income and non-interest earnings.
In the first quarter of this year, the bank reported a 19.3 percent jump in net profit to Sh2.2 billion, building on a robust performance in the full-year ending December 2018 when net earnings had jumped by 45.5 per cent to Sh6.27 billion.