Dar es Salaam. Banks are cutting jobs as they seek to align their operations with the new economic realities and cope with declining profit margins.
An analysis by The Citizen shows that the number of jobs in the banking industry dropped by almost 400 during the period between June 2017 and June 30, 2018 as banks focused on internal consolidation to remain afloat amid declining profits and high levels of nonperforming loans (NPLs).
Tanzania is home to at least 58 commercial banks. The sector’s net profit went down from Sh438 billion in 2015 to Sh423 billion and Sh286 billion in 2016 and 2017, respectively. First half figures show that profits may plunge further this year.
At least 40 banks have released their financial statements for the first half of the current calendar year.
An analysis of the statements shows that the 40 banks jointly shed a total of 381 jobs off their payrolls as of June 2018 to remain with a total of 12,156 employees.
Until June 30, 2017, they had a total of 12,537 employees.
Some of the lenders that had their employee numbers cut include Access Bank Tanzania, Ecobank, Exim Bank, Akiba Commercial Bank (ACB) and Commercial Bank for Africa (CBA) and CRDB Bank Plc. Access Bank led the pack by laying off a total of 142 employees as of June 30, 2018. It remained with 634 employees from a total of 776 employees in June 2017.
Despite opening five new branches, CRDB Bank Plc cut its employee numbers by 30 as of June 2018. The Dar es Salaam Stock Exchange-listed bank had 2,882 employees as of June 30, 2018, down from 2,912 as of June 2017.
Ecobank had reduced the number of branches to seven by June 30, 2018 from eight in June 2017.
It reduced the number of employees by 57 to remain with 128 from 185. The bank’s managing director, Ms Mwanahiba Mzee, said the downsizing was in line with the Ecobank Group’s digitisation drive.
“The company’s restructuring and rightsizing of headcount activities cut across the whole Ecobank Group with a new strategy,” she said.
Known as “Roadmap to Leadership”, Ecobank Group’s new strategy focuses on digitalisation of banking products and processes to ease banking and enhance customer service.
Access Bank marketing manager Sijaona Simon said the decrease was largely driven by departure by several employees who left for other jobs within the sector. “We train a number of people at our bank and we do not bind them to remain with us whenever they want to go and seek greener pastures elsewhere,” he said.
ACB and Exim had their employee numbers drop by 56 and 27, respectively. This was despite the fact that the latter opened two new branches.
CBA’s employee number was reduced to 160 from 181. It also closed five branches during the year ending June 2018 to remain with six outlets. According to Ms Mzee, however, the future of the banking industry in Tanzania remains bullish, banking her hopes on the ongoing economic development projects within the country and beyond.
“For instance, Tanzania is moving towards a middle income country and this has led to major improvements in infrastructure (roads, harbour), industrialisation, stable power generation and urbanisation,” she said.
The growing youthful population, improving technological uptake and education levels create a new banking market (customer base) and new products offerings, she explained.
The figures also show that some banks, including NMB Bank Plc, Amana Bank, United Bank of Africa, Barclays Bank Tanzania and Azania, were able to marginally increase their employee numbers.