NIC Bank is in the process of sending home 32 senior managers joining other banks such as Family Bank, Sidian as well as First Community Bank which have sent their employees home to cut on their costs.
NIC Bank, during the release of its quarter three financial results, announced a 6.3 percent profit drop for the period ended 31st September 2016 to 3.3 billion shillings lower than the 3.5 billion shillings realized last year at the same period.
The NIC’s bad loan records increased to 3.1 billion shillings, (Five times) while the three-month un serviced loans grew to 14.2 billion shillings from 6.8 billion shillings.
The 32 senior managers about to be send home are aimed at helping the lender cut on the operational costs mostly spent on payment of salaries for staff.
NIC is not the only lender who has announced job cuts as a way of maintaining operational costs. Family Bank has announced plans to lay off an unspecified number of employees, Equity Bank already announced that 400 employees had been laid off and many others are set to follow the trail.
The banking sector in Kenya seem to be embracing technology especially the mobile banking platforms taking over all the roles that were initially being performed by the tellers. Almost every bank at the moment has an app for mobile banking with most services being undertaken by the customer.
The Interest Rates Capping Law also seems to have gotten most banks unaware and greatly reduced on their income. Many banks are blaming the fall in their profits on bad loans from their customers.