StanChart spends Sh500m on Nairobi centre lay-offs

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Standard Chartered Kenya #ticker:SCBK spent half a billion shillings last year on paying off 100 workers at its Nairobi service centre, whose operations have been moved to India.

The NSE-listed #ticker:NSE bank says in its 2016 annual report that its redundancy charge rose to Sh556.6 million last year, the bulk of which went into the service centre layoffs.

The Nairobi centre had a staff of 300 who provided services such as accounting, reporting, systems maintenance, and information management support in six countries including Kenya, Uganda, Tanzania, Zambia, Botswana and South Africa.

StanChart Kenya finance director Chemutai Murgor yesterday said the Kenyan unit’s redundancy cost of Sh500 million applies to those staff directly linked to its own operation, numbering 100.

“The redundancy affected six countries, so the reported number is the share of the Kenya unit…you have to prorate the headcount as well when attributing the cost,” said Ms Murgor on the sidelines of the bank’s annual general meeting yesterday.

“We have also redirected some of the affected staff to other business segments, meaning that not all 300 were made redundant at the service centre.”

The closure of the Nairobi support unit left StanChart Plc with three such centres located in India, Malaysia and China.

StanChart Kenya says in the annual report that its staff count at the end of last year stood at 1,872 compared to 1,881 at the end of 2015.

In 2015 the lender had cut 167 jobs in a lay-off that resulted in three divisions of corporate and institutional banking, commercial banking and retail banking.

The bank reported a 42.7 per cent increase in net profit to Sh9.05 billion for the full-year ended December 2016.

However, the lender has reported a 20 per cent drop in first quarter 2017 net profit to Sh2 billion, weighed down by lower transaction-based income and higher expenses.

Its loan book expanded at a slower pace of 6.4 per cent to Sh116.8 billion in the quarter.

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