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Stanbic defends job cuts as profit hits Sh4 billion

Thursday August 8 2019

Charles Mudiwa

Stanbic Bank Kenya CEO Charles Mudiwa during an investor briefing on August 8, 2019. PHOTO | DIANA NGILA | NMG 

BRIAN NGUGI
By BRIAN NGUGI
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Stanbic Holdings chief executive Charles Mudiwa has defended plans to lay off hundreds of workers, saying it was necessary to make the lender agile.

Speaking at an investor briefing in Nairobi on Thursday where the lender announced its half-year results, Mr Mudiwa argued that a changing business environment had made the drastic measures urgent.

“The voluntary early retirement scheme is an outcome of a clear strategy where we are looking at how we become more efficient in the business that we run,” he said.

“As we digitise and become more digital, it means some functions we have to reorganise to make us future-ready and be able to compete as a business.”

The bank has been reporting strong profit growth in the past two reporting cycles, on the back of higher interest income and non-interest earnings.

Stanbic Holdings on Wednesday posted a 14.38 percent jump in net profit to hit Sh4 billion in the half year ended June, boosted by higher interest and non-interest income.

This is compared to Sh3.5 billion in the same period last year.

The lender’s board proposed an interim dividend of Sh1.25 per share.

Mr Mudiwa said the voluntary early retirement process is ongoing but added that no definite number of staff to be let go had been arrived at, although sources earlier told the Business Daily that up to 200 jobs were on the line.

“We are not targeting any number of staff. It is based on the applications,” he said. “We have 1,088 staff. A portion of them will apply. We don’t expect it will be all of them.”

Stanbic Bank Kenya head of human capital Darliah Mbugua said the application process, which started in July concludes today paving the way to the review of the applicants.