More Join the Unemployed Bracket as KCB Bank Lays off Over 700

KCB Group CEO and MD, Joshua Oigara, makes his address during the full year financial result announcement of KCB Group held at Radisson Blu, Nairobi

KCB Bank has cut down its workforce from 7,192 employees as at December 2016 which is according to the Standard to 6,483 employees as at December 1, 2017 Investor Presentation report. This indicates that 709 staff were laid off which could be linked to the bank’s announcement on April 2017 on its restructuring exercise where it aimed at saving at least Kshs 2 billion on staff costs yearly. KCB Bank has been carrying out the same restructuring process since year 2013 where it laid off 1045 employees and also in year 2016 where 1026 employees were sent home.

“In light of industry and market conditions, we are alive to the fact that we must run our business more efficiently and reduce costs to meet our long-term financial targets. That was one of our focus areas in 2017 as part of our transformation journey,” said Mr Oigara.

The bank confirmed that the restructuring process was necessary so as to align it to an industry whose future prospect has been dimmed by legislative and regulatory reforms as well as fast-evolving technology platforms which are now attracting non-traditional players into the financial services sector.

Despite the bank’s restructuring process to lay off its employees, its expenditure as at the end of financial year 2017 rose by Kshs 1.43 billion which could be mainly contributed by a continued increase in staff costs since year 2012 where the costs were Kshs 11.86 billion, Kshs 13.47 billion in year 2013, Kshs 13.99 billion in year 2014, Kshs 15.31 billion, Kshs 17.72 billion in year 2016 and in year 2017 the staff costs hit the highest at Kshs 19.5 billion.

The group targets a Cost to Income Ratio (CTI) of 46.0% by end of their financial year 2018 which is lower as compared to the its year 2017 target which was at 51.4%. According to Standard, this target reduction is mainly because the group is past the restructuring phase as said by the Chief Executive Officer Joshua Oigara.

The bank is acting fast on its plan to automate most of its services as it will close its branches in Kericho East, ICD Kibarani and Moi International Airport on June 30th 2018.

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Business Reporter at Urbwise. Areas of interest are business, politics, music and dogs.