KCB to layoff more than 77pc of employees

By Ronald Owili

Tellers and clerks employed by the KCB Group are among employees set to be affected in the inevitable layoff as more than 77 percent of the bank’s transactions are now done outside its branches.

In a letter to its staff, group Chief Executive Officer Joshua Oigara says the staff rationalization programme has been dictated by the need to sustain growth citing an unfavorable macroeconomic environment worsened by the new interest rates capping regime.

Staff interested in applying for a voluntary early retirement have one month to do so.

In the letter which dictates terms of the staff rationalization programme, the region’s largest lender has outlined a number of packages which is set save the bank at least ksh 2 billion annually.

Earlier reports suggested that up to 500 employees could be axed, but the bank is sweetening the buy-out deal.

Employees aged below 50yrs will be laid off with a compensation package amounting to one and half months’ basic salary for every year worked while those above 50yrs old will either be paid one and half months’ basic salary for every year worked, discounted by 10 percent for every year above 50 years or one and half months’ of basic salary for the remaining period to the retirement age of 60yrs depending on which is higher.

Managers, section heads and clerical staff will receive 3 months of paid salary, while other staff members will get 4 months of the same.

The bank will also pay off outstanding leave days, medical covers for a year, 25% rebate on loans for 6 months after which commercial terms will be applicable.

The rationalization is backed by the fact that of its 10 million customers or 53% of customer base are now using mobile banking platform and also processing upto 90% of all loans via mobile.

ATMs now handle 13% of transaction, agency banking 4%, point of sale 7% while branches handle 23% which continues to decline.

This means 77% of all transactions now done outside branches.

The bank has however put in place a training programme on financial management, entrepreneurship and transitioning for those likely to be affected.