Dar es Salaam. The Bank of Africa (Tanzania) is NOT planning mass retrenchment of its workers.
It is, however, embarking on restructuring of its head office departments in an endeavour to make the bank’s management lean and efficient.
The process will involve merging of departments to make it well organized and resourceful.
“Bank of Africa is in Tanzania for the long haul, and we believe in the economy and opportunities of this country,’’ managing director Joseph Iha told The Citizen at the weekend.
He assured the bank’s customers and employees that everything was well with the bank.
In October last year (2019), the Bank of Africa BMCE Group and shareholders invested Sh22.9 billion to further strengthen its capital.
Last year, the bank emerged with different strategies comprising a massive cleanup of its loans book that ultimately enabled a drop in its Non-Performing Loans (NPLs) from 16 percent to nine percent.
It remains confident that the ration of its NPLs-to-total-gross-loans will drop to five percent as recommended by the Bank of Tanzania this year.
Assuring the public that the bank’s performance was improving following the strategies it undertook, he said the bank last year disbursed fresh loans amounting to Sh150 billion to small and medium-size entrepreneurs.
Its total loans for the year grew by 4.4. percent, to close at Sh277 billion.
Customer deposits grew by 17.5 percent - to Sh390 billion - while total assets grew by 23 percent, from Sh459 billion to Sh564 billion
He noted that BoA Tanzania has also been able to invest in a number of technologies that aim to empower its staff as well as improve the bank’s performance and customer experience.
“The bank has been growing very fast since 2014, and we have made plans for expansions,” he said - adding that, due to a recent change in management, the bank also needs to change its strategy to reach its goals. Explaining this, he said the process of reorganizing aims at merging departments to avoid having too many heads of department. “We aim to have a few departments that are more efficient,” he stressed.
However, he noted that, after merging, some managers will be transferred to other units. Also, the bank will enter into negotiations with the people who will be left out of the new structure to agree with them on a decent package.
He revealed that the bank recently issued a circular to prepare its staff for the outcome in the eventuality that people who have to be dropped - and who fail to reach an agreement during negotiations - will just be retrenched.
“We are legally preparing ourselves in accordance with the law to ensure that the process is legal for workers with whom we fail to reach an understanding during negotiations, thereby having to retrench them,” he said.
He stressed that the bank was investing for the long term - and that the problem was not the number of staff but the cost of the bank’s head office structure. It was revealed in the circular that the bank’s operating expenses had increased by 8.5 percent as of December 2019 - especially with staff costs also rising inordinately.