NAIROBI, Kenya, Apr 21 – KCB Group has announced that it is rolling out a voluntary buyout programme for employees considering early retirement as the bank pursues a business strategy driven by mobile and tech services.
The staff rationalization programme is expected to saveKCB an estimated Sh2 billion per year after recovering buy-out costs within 18 months.
The group’s Chief Executive Officer Joshua Oigara says the adjustment is staff numbers has been occasioned by changes in the industry that include increased legislative and regulatory reforms, and the emergence of non-traditional players into the financial sector.
“In 2016 we invested Sh2.5 billion in upgrading our technology infrastructure among other projects meant to secure our future. This is a strategic initiative that will help us simplify our operations, reduce our expenses, stay closer and much connected to our customers and boost returns to our shareholders,” said Oigara.
KCB, like many other banks in Kenya, has seen a dramatic uptake of alternative channels by customers like mobile and agency banking, threatening the traditional brick – mortar, and teller model.
During the announcement of the group’s 2015/16 financial results, KCB revealed that 90 percent of the loans processed were through the KCB-MPesa mobile platform, with mobile loans reaching Sh18.5 billion since March 2015.
KCB’s mobile accounts has hit 10 million in two years necessitating a change of strategy that means less hands needed to serve customers who have become more virtual than physical.
Capital Business has learnt that the programme kicks off immediately and will be open to staff opting for early retirement until May 20th.
It is not immediately clear how many employees the bank is targeting neither has it been communicated on what will happen if the numbers are not achieved, but employees whose application will be accepted will have a month’s notice to leave the institution.
However, the bank says the buyout package offers generous severance terms comparable with industry and labour law stipulations, a notice pay out of at least three months and family access to medical insurance cover for the rest of the year.
Other benefits include loan rebates that will see 25 per cent of the outstanding staff loans balances paid off and the remainder to continue at staff rate for six months, after which commercial rates apply.
“We understand that this is a big decision taken by our company, and one that will have an impact on some of our staffs’ personal lives,” says Oigara.
“In line with this, we are offering comprehensive training workshops that will cover personal financial planning, entrepreneurship, business management and other important areas to employees who volunteer to ease the transition.”