Business / Companies
MBCA Bank to embark on further staff layoff programme
10 Jun 2011 at 07:50hrs | Views
MBCA Bank, a commercial banking unit majority-owned by South Africa's Nedbank Group, is to embark on a further staff layoff programme after an initial one undertaken last year failed to cut the workforce size to desirable le-vels.
A bank spokesperson told The Financial Gazette the staff redundancies were part of endeavours to maintain viability in the bank in an environment characterised by cutthroat competition for scar-ce deposits.
MBCA spokesperson, Dedrey Mutimutema said in a written response to questions from The Financial Gazette: "The bank was forced to implement severe survival measures to remain operational including a host of cost cutting measures introduced in 2009 and a voluntary retrenchment exercise in 2010 which did not, however, achieve the sufficient reduction in staff numbers."
"There is, therefore, need for the bank to operate with an appropriate number of staff who-se minimum expectations the bank can sufficiently meet on a sustained basis."
Mutimutema said the bank was currently overstaffed, resulting in a bloated cost structure that could not be sustained by current revenue levels.
Nedbank, SA's fourth-largest bank by market capitalisation and customer numbers, has a 74 percent stake in MBCA.
Last year, Agribank, NMBZ Bank, Barclays Bank (Zimb-abwe), ZABG Bank, and many others were forced to retrench to remain viable. CBZ has so far ruled out plans to cut staff, but said it would continue to improve efficiency.
Analysts say some banks will struggle this year to avoid retrenchments unless they dramatically improve revenue.
Meanwhile the MBCA Bank confirmed that it had submitted recommendations to the Ministry of Youth Indigenisation and Economic Empowerment through the Financial Services subcommittee to comply with government's proposed 51 percent indigenisation.
A bank spokesperson told The Financial Gazette the staff redundancies were part of endeavours to maintain viability in the bank in an environment characterised by cutthroat competition for scar-ce deposits.
MBCA spokesperson, Dedrey Mutimutema said in a written response to questions from The Financial Gazette: "The bank was forced to implement severe survival measures to remain operational including a host of cost cutting measures introduced in 2009 and a voluntary retrenchment exercise in 2010 which did not, however, achieve the sufficient reduction in staff numbers."
"There is, therefore, need for the bank to operate with an appropriate number of staff who-se minimum expectations the bank can sufficiently meet on a sustained basis."
Mutimutema said the bank was currently overstaffed, resulting in a bloated cost structure that could not be sustained by current revenue levels.
Last year, Agribank, NMBZ Bank, Barclays Bank (Zimb-abwe), ZABG Bank, and many others were forced to retrench to remain viable. CBZ has so far ruled out plans to cut staff, but said it would continue to improve efficiency.
Analysts say some banks will struggle this year to avoid retrenchments unless they dramatically improve revenue.
Meanwhile the MBCA Bank confirmed that it had submitted recommendations to the Ministry of Youth Indigenisation and Economic Empowerment through the Financial Services subcommittee to comply with government's proposed 51 percent indigenisation.
Source - FinGaz
