16 April 2018

Kenya: Banks in Kenya Retrenched More Than 1,500 Staff in 2017

Photo: Capital FM
300 people lost their jobs after StanChart moved some of its back-end operations to India.

About 1,620 employees of listed banks in Kenya were retrenched in the past one year, a report has shown.

According to a financial report released by Cytonn Investments on Sunday, the staff were retrenched following closure of 39 bank branches across the country during the 2017 financial year.

Among the institutions which disclosed the number of employees laid off are Equity Group which led with 400 retrenchments, Barclays Bank (301), Standard Chartered Bank (300) and KCB Group (223).


Others are National Bank of Kenya (150), First Community Bank (106), Sidian Bank (108) and NIC Bank (32).

The figures could be higher given that data was unavailable from some of the banks affected.

According to the report, this measure was necessitated by a tough operating environment that was brought about by the Banking (Amendment) Act of 2015 which introduced a floor on deposit rates at 70 per cent of the Central Bank Rate and rate caps on loans at four per cent above the CBR.


In a meeting held on March 19, 2018, the 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," states the Cytonn report.


There has been pressure from industry players and international lenders 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 the lending rate law.

However, this has drawn resistance from a section of legislators and the Consumer Federation of Kenya which say such a move will be counterproductive to Kenyans.

More on This

Kenyan Banks Cut 1,620 Jobs in 2017, Closed 39 Branches

Kenyan Banks let go of 1,620 staff in 2017 as they took proactive measures aimed at increasing operational efficiency in… Read more »

See What Everyone is Watching

Copyright © 2018 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.