Stanbic Bank Zimbabwe is laying off employees as part of cost cutting measures that could impact several of its workers, it has been learnt.
The lender has already cut about 34 jobs with more expected to leave Stanbic through voluntary retrenchment.
Stanbic Bank Zimbabwe spokesperson, Palmer Mugavha, confirmed to Business Times that the bank has started reducing its headcount to rein in costs.
The lender, like many other banks in Zimbabwe, has faced serious headwinds. Banks are increasing their reliance on digital capabilities as the devastating Covid-19 pandemic impacted on their operations.
Consequently, banks are closing branches to cut expenses and are speeding up their digitisation drive.
“Prudent business practice requires that the various businesses within Standard Bank Group, constantly review their performance and operating models.
“Changing customer behaviour and the digitisation of our banking channels has led to process innovations and efficiencies in some of our markets including Zimbabwe, which have consequently led to, inter alia, headcount adjustments,” Mugavha told Business Times.
He added: “The headcount revision is being undertaken in compliance with Stanbic Bank Zimbabwe’s employee policy, the laws and regulations of Zimbabwe and in consultation with all the relevant stakeholders.”
Mugavha said the bank would honour all obligations and pay the employees as agreed upon in the contracts.
In its financial results for the year to December 31, 2021, Stanbic swung back into the black, reporting a ZWL$1.1bn profit from a loss of ZWL$44m reported in prior year on the back of a jump in non-funded income.
The bank’s net fee and commission income grew by more than half to ZWL$2.6bn in the reviewed period from ZWL$1.7bn in 2019.
The improvement in the bank’s fee and commission income was largely underpinned by the impact of the rapid depreciation of the local currency against the US$ on our foreign denominated commission income.
Stanbic chief executive Solomon Nyanhongo said inflation adjusted net interest income declined by 18% to ZWL$1.7bn from ZWL$2bn in 2019 despite the strong growth in the bank’s gross lending book from an inflation adjusted balance of ZWL$4.3bn to ZWL$9bn as demand for local currency funding continued to increase in line with growing working capital requirements.
He said lending rates remained subdued during the year and could not match the 14% average month on month inflation on account of market and regulatory constraints and, in turn, contributed to the receding interest income.
Stanbic ended the year with a qualifying core capital of ZWL$3.8bn up from the 2019 figure of ZW$651.2m, well ahead of the regulatory minimum of ZW$25m.
The leading financial services institution has remained ahead of the 2021 minimum capital threshold which is the local currency equivalent of US$30m.
The financial institution supported some of its large corporate clients with foreign currency to enable them to continue producing ethanol which is the key ingredient in producing alcohol-based sanitisers.
Some pharmaceutical producers were provided with foreign currency for the purchase of raw materials necessary to manufacture drugs, helping to ensure the health sector maintains the required levels of medication for patients.
Stanbic said a total of US$145,000 in foreign currency was provided to other clients to procure sanitisers and sterilisation chemicals.
The bank also facilitated the acquisition of medicines and hospital equipment by some of its clients in the health sector totalling US$2.5m.