NCBA has embarked on a lay off exercise as the COVID-19 pandemic has significantly affected its operations. The bank says that COVID 19 has affected the execution of its growth plan. NCBA has had to shelf the expansion of its branch network and is now focused on supporting its customers through the tough economic time.
The first phase of the restructuring exercise is a Voluntary Exit Program whose application will run until November 16, 2020. Those who pick this option will receive benefits that include salary to 31st December, 2020. The exit pay will be calculated at the rate of one month’s salary for every year worked and compensation for leave days not taken.
The employees who will voluntarily leave will also receive a 10% discount on outstanding loans if settled within six months of exiting. All outstanding loans will accumulate interest at a discounted staff rate for up to one year.
The second phase will involve a redundancy program with the number of employees to be laid off dependent on the outcome of the VEP. This retrenchment program will kick in on or before December 31st, 2020.
Like other lenders, NCBA has offered relief to hard-hit customers in the form of loan moratoriums and fee waivers. The lender has also been seeking for an IT Manager to sort out teething problems NCBA has been experiencing since the merger of CBA and NIC.
“Our expectations are that recovery will be slow, there are businesses that may never re-open and many of our customers will require for a longer period to come,” said NCBA Group CEO John Gachora.
Figures in its H1, 2020 earnings for the period ended 30th June, 2020, shows that NCBA significantly increased its provisions for loan losses from KSh 1.3 Billion to KSh 7.6 Billion.
The lender’s net earnings edged to KSh 2.6 Billion at the end of the six months ended 30th June, 2020. This is compared to KSh 2.4 Billion posted at the end of the same period last year.
Its balance sheet grew from KSh 262 Billion to KSh 514 Billion while loans disbursed to customers rose significantly from KSh 120.3 Billion to KSh 248.3 Billion.