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NBK staff face jobs loss after merger with KCB

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NBK staff face jobs loss after merger with KCB

A National Bank of Kenya branch in Nairobi
A National Bank of Kenya branch in Nairobi. FILE PHOTO | NMG 

National Bank of Kenya (NBK) #ticker:NBK workers face the possibility of losing their jobs two years into the proposed merger with KCB Group #ticker:KCB , a shareholders’ circular on the ongoing transaction has revealed.

The planned redundancies are intended to make the merged entity more efficient, NBK said in the letter sent Tuesday to its shareholders.

NBK will operate independently for two years after the Sh5.6 billion share swap transaction and then merge with KCB, at which point the reduction of NBK’s staff count of 1,356 workers is set to start.

“KCB will among other things conduct a review of the organisational structure to improve the management and operations of NBK from an efficiency as well as product view point,” said NBK in the circular.

“The reorganisation will lead to an overall reduction of the workforce and optimisation of the distribution network.”

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NBK does not say how many jobs are expected to be lost in the merger. KCB is expected to make its own disclosures to its shareholders regarding the transaction, which will also disclose its staffing plans after its merger with NBK. KCB has a staff count of 6,220.

Besides the KCB/NBK merger, the tie-up of NIC Group #ticker:NIC and CBA Group is also expected to result in job losses.

The Competition Authority of Kenya (CAK) offered CBA and NIC employees protection from sacking for one year after which the newly-merged entity will be free to trim its workforce.

Mergers ordinarily come with overlaps of branch networks, technology, management and support functions.

The planned layoffs at NBK will build on the lender’s recent retrenchments that were carried out in a bid to cut costs and enhance efficiencies.

NBK laid off a total of 112 employees who took up a voluntary early retirement offer last year, costing the lender Sh541.2 million.

The retrenchments affected management ranks the most, with their number dropping to 721 from 791 in 2017. The number of clerical workers also declined to 432 from 494 while contract employees shrunk to 203 from 214.

The lender saw its cost-to-income ratio rise to 74 percent last year, one of the highest in the industry, from 67 percent the year before.

KCB and NBK have branches close to each other in multiple locations.

NBK says the merger is intended to solve its weak capital position. The bank, which has fallen short of most of the minimum capital requirements, will end up with a 4.5 percent stake in KCB.

KCB plans to invest up to Sh7.5 billion in NBK to shore up its capital and fund its growth ahead of the merger.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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