NCBA bank plans to shed off some of its staff commencing November through a voluntary exit program beginning November.
NCBA Group Managing Director John Gachora through a memo to staff says the redundancies have been attributed to the tough and uncertain operating environment.
The lender is undergoing a consolidation process after the CBA, NIC merger creating Kenya’s third-largest bank by asset base.
“The COVID-19 pandemic, which is the most harrowing health and economic crisis of our lifetime, has affected the execution of our growth plans. We have had to defer our plans to scale our branch network and have taken unprecedented steps to support our customers in weathering this storm through loan moratoriums and fee waivers,” he said.
“Our expectation is that recovery will be slow; there are businesses that may never re-open and many of our customers will require support for a longer period to come.”
The staff downsizing will be executed in two phases beginning with the Voluntary Exit Program (VEP) whose applications end November 16.
On the other hand, the lender will roll out a redundancy program whose terms and conditions will be dependent on the outcomes of the first phase and affected staff will be released from employment before the end of 2020.
During October’s Kenya Bankers Association My Chat with a CEO popularly known as CEO Chat, Gachora disclosed, “Banks are acknowledging larger Non Performing Loans (NPLs) on their books. That said, behind the scenes, banks continue to work very closely with their customers to manage these risks. Banks are clear that this period is not about profits, but maintaining resilient balance sheets for a sustainable future.”
“No one has the crystal ball on this pandemic…what is important is to stay very close to our customers to understand how their businesses are changing to cope with this prolonged pandemic,” he said.
Gachora projects that with the coronavirus pandemic, about 10 to 20 percent of businesses will permanently. Recovery will be slow and perhaps good signs may appear later next year with a boom season coming in 2 years.
“A lot will depend on what our policymakers and government do to assist the economy.”