Barclays ‘spent Sh479m to lay off workers in 2018’

Barclays Bank of Kenya #ticker:BBK spent Sh479 million to compensate retrenched employees last year when the size of its workforce dropped for the fourth year in a row.

The lender has disclosed that it conducted a voluntary staff exit scheme in 2018, with 78 full time staff taking it up. Total headcount dropped by 142 to close the year at 2,128 employees.

This adds to the 2017 restructuring that saw 323 staff exit the bank as part of a Sh500 million exercise that included shutting down 12 branches.

From having 6,900 employees in 2007, Barclays’ headcount has been falling over the years as digitisation programmes and search for increased efficiency took shape in a sector defined by cut-throat competition.

Last year, the bank’s cost to income ratio was at 51 percent, when adjusted for one-off restructuring investments and Sh387 million spent as part of a continuing process of separating from London-based Barclays Plc. This is the lowest ratio in seven years.

The bank said that further efficiencies were realised from the closure and relocation of four branches. During the year, the bank’s costs stood at Sh17.2 billion, representing a two percent year-on-year growth.

Chief executive Jeremy Awori said this helped the bank post fastest operating profit in eight years, being ahead of market average of four per cent and tier one average of five percent.

“A strong revenue growth buttressed by well-contained cost base, increased our operating profit by eight per cent year-on-year, which was the highest growth since 2010,” he said.

Salaries and allowances dropped by 1.4 percent to Sh8.34 billion, helping take pressure off operating expenses. Barclays says that it wants to continue diversifying its revenue streams and further enhance efficiency to send cost to income ratio below 50 percent.

The bank has been turning focus away from physical branches to match the changing needs of customers.

As at last year, alternate channels commanded 70 percent of the transitions.