Abasa Bank has announced plans to retrench more employees before the year ends, this time in the management level.
In an internal memo sent to staffers, the managing director Jeremy Awori said that the targeted staffers are those in the head office and support functions.
“Last month, I announced a Voluntary Exit Scheme (VES) via a Circular dated 25 November 2020. We have reviewed all VES applications and the process is in its final stages. We were however not in a position to accommodate all Colleagues who applied for the VES due to business priorities aligned to their roles. We appreciate that those who were unsuccessful will be disappointed but sincerely hope that they will take this as an endorsement of their contribution to the success of the business,” said Awori.
“Consequently, we will be proceeding with a second phase of the restructuring process which will entail carrying out some redundancies in our Management cadre. The process will commence immediately and will include consultation and engagement with the Colleagues that are at risk of redundancy,” added the memo.
The lender’s profits shrunk by 66.1 per cent in nine months to September to Ksh1.9 billion from Ksh5.6 billion last year.
The lender’s operational costs picked up by 28 per cent to Ksh20.1 billion from Ksh15.7 billion as the bank’s cover for loan defaults grew by 245 per cent to Ksh7.6 billion.
Absa’s transition costs from the Barclays Bank brand grew by 11.8 per cent in three months to Ksh1.9 billion from Ksh1.7 billion in June.
Higher costs grew ahead of operating income which picked up by a mere 2.4 per cent to Ksh25.4 billion from Ksh24.8 billion last year.
This is as net interest income hit Ksh17.1 billion from Ksh16.8 billion and non-interest funded income (NFI) picked up to Ksh8.3 billion from a flat Ksh8 billion last year.