An Equity bank branch in Nairobi. [ photo / Business Daily. ]
Bank employees cost rose by Sh2.96 billion to hit Sh72.7 billion for the nine nine months to September representing a 4.3 per cent increase despite lenders shedding off 1,933 staffs amid the wake of the interest rate cap law and new technological advancements.
According to the sector’s financial data, the top lenders accounted for the for the huge part of increase signalling their fierce search for top talent in the sector that has been deemed to be the key in driving revenue growth in a tough operating environment.
Among the top lenders is KCB, which led with the highest wage bill at Sh 13.8 billion for nine months representing 11 per cent increase as compared to Sh 12.4 billion recorded in previous financial years.
M-Oriental lender recorded the highest percentage increase in wage bill as it closed the nine months at Sh 179 million from Sh 127.4 million recorded in a similar period last year representing a 40.5 per cent improvement.
A survey report released on October by the Kenya Bankers association (KBA) had revealed that banks reduced its staff from 28,009 employees as at August 2016 to 26,076 employees by June 2017 as a move to make new adjustments in the sector that was facing tough times following the signing into law if interest cap rate last year.
Lenders have however been crying foul on the rate cap law as they highly depended on the loan interest for their financing compelling a majority of Banks to turn to government lending and cheaper sources of funds to finance their loan books.
Banks have also been outsourcing services to agents, saving them millions in the process.