Barclays-Kenya to sack workers in restructuring plan after merger
Mr Jeremy Awori, the incoming Barclays Bank of Kenya managing director (left) and his predecessor Adan Mohamed during the release of the bank’s financial results yesterday for the year ended December 31, 2012, at the Inter-Continental Hotel in Nairobi. SALATON NJAU| DAILY NATION
What you need to know:
- Mr Mohamed said the bank will carry changes in its investment arm in line with its London head office and conduct necessary changes to ensure maximum returns from investments and increased returns to shareholders
Barclays Bank of Kenya will lay off some of its staff as the institution restructures to align its operation to the One Africa Strategy.
Under the new strategy, announced last year after the parent company (Barclays Plc) merged its Africa operations with its South Africa subsidiary- Absa Group- to form Barclays Africa, the bank will consolidate and centralise some of its functions thus creating redundancy.
Addressing an investors briefing yesterday, BBK’s outgoing chief executive Adan Mohamed revealed that the bank is currently reassigning some of its staff in a process expected to end in June.
“We are also in talks with workers’ unions to see how those who will not find positions in the redeployment will be discharged of their duties,” said Mr Mohamed, adding that the bank had achieved efficiency by leveraging on technology, making the forthcoming changes inevitable. Mr Jeremy Awori, who replaced Mr Mohamed was also present.
Mr Mohamed said the bank will carry changes in its investment arm in line with its London head office and conduct necessary changes to ensure maximum returns from investments and increased returns to shareholders.
BBK announced an eight per cent increase in profits after tax to Sh13 billion in 2012 from Sh12 billion in 2011 on increased interest income.
On Tuesday, Barclays Plc also announced that it will lay off 3,700 jobs this year after it was hit by the Libor-rate rigging scandal and debt crisis in Europe that saw it plunge into losses of over Sh142.2 billion in 2012 from Sh408 billion profits in 2011.
Last week, Capital Markets Authority approved request by Barclays Plc to transfer its 65 per cent shareholding to the Barclays Africa completing the shareholding restructuring.
Barclays Africa brings together operations in Kenya, Mozambique, Botswana, Ghana, Mauritius, Seychelles, Tanzania, Uganda, and Zambia, and South Africa.
Barclays-Kenya will, however, remain listed at the Nairobi Securities Exchange where the minority shareholders will continue to trade its shares.
According to Mr Mohamed, the Barclays-Kenya 2012 profits were boosted by containing the interest expense on customer deposits that doubled to Sh2.8 billion against a five per cent growth in interest income to Sh21 billion in 2012 from Sh17 billion in 2011.
“The period under review had harsh macro-economic conditions with very high interest rates on deposits and inflation that would have led to increased defaults in loan repayments by customers but we were keen to ensure that didn’t happen,” said Mr Mohamed.
The bank grew its interest income by 19 per cent to Sh21 billion in 2012 from Sh17.6 billion in 2011 but that was offset by a higher interest expense that grew by over 130 per cent to Sh2.8 billion from Sh1.2 billion in 2011.
