UPDATE 1-KCB begins job cuts to counter technology and Kenya rate cap | Reuters


(Adds details)

NAIROBI, April 20 Kenya’s KCB Group,
the country’s biggest lender by assets, said it has offered
employees voluntary early retirement in a bid to save 2 billion
shillings ($19.36 million) each year.

KCB, which also operates in five neighbouring countries, had
already said it would cut an unspecified number of jobs, mainly
due to technological changes and the capping of commercial rates
in Kenya last September.

Kenya has been a global pioneer in technological innovations
in finance, launching the M-pesa mobile phone cash transfer
system a decade ago and the first mobile phone-based bond last

The cost of the proposed buyouts, which are being offered in
line with local laws, will take a year and a half to recover,
KCB said on Thursday.

Staff have a month to apply, and the group plans to complete
the exercise in the middle of June, sources at KCB told Reuters.

KCB said the cuts would help it align its staff with a
banking industry that had “been dimmed by legislative and
regulatory reforms”. It also said technological changes were now
attracting non-traditional firms into the sector.

The government set a commercial interest rate limit of 400
basis points above the central bank rate, which stands at 10
percent. The cap, which also set a minimum deposit rate, has
curbed bank earnings and private sector credit expansion.

The government argued lending rates were too high, a
position opposed by banks who argued the cap could lead to
credit rationing.
($1 = 103.3000 Kenyan shillings)
(Reporting by Duncan Miriri; Editing by Alexander Smith)

Source: einnews.com