Stanbic Bank has announced a plan to send home up to 200 employees under an early retirement scheme which cited ‘digitization’ as the major reason for the job cuts.
According to the voluntary retirement plan, both permanent and pensionable employees of the bank are eligible.
Those willing to opt for the plan will receive a payment calculated at the rate of 1.5 month’s salary for each completed year of service in addition to the pay in lieu of notice and compensation for unused leave days.
Further reports indicate that the Bank has offered employees willing to sign the plan a 25 percent discount on the balance of any outstanding loans if settled immediately after exit.
The employees will continue repaying their loans on staff interest rates for six months, after which the outstanding amounts will revert to commercial terms.
Those who take up the plan will be allowed to remain on the bank’s medical scheme until the end of 2019, however, they can opt-out of the medical scheme and get paid the equivalent of the cost of the insurance to the bank.
In 2018, the lender, which is a subsidiary of Nairobi Securities Exchange-listed Stanbic Holdings reported a rise in employee costs by three percent to Sh5.595 billion but it went ahead to cut its staff costs by 5.3 percent to Sh1.417 billion.
In the first quarter of 2019, it reported a 19.3 percent jump in net profit to Sh2.2 billion which was helped by increased lending and higher income from fees and commissions.
The lender’s net profit stood at Sh2.2 billion in the review period compared to Sh1.9 billion a year earlier while the total operating costs rose by 25 percent in the first quarter to Sh3.55 billion, from Sh2.85 billion in quarter one of 2018.
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