Major SA banks to shed staff

12 Aug.

Major SA banks to shed staff.

Retrenchments are looming in the home loan departments of two of the four major banks.

Jan Kleynhans, the chief executive of First National Bank (FNB) Home Loans, confirmed that the bank was restructuring its sales department but stressed this was not a retrenchment programme across the business but a specific process to improve operating efficiencies in this part of its business.

“At the moment we have just taken the first steps by advising some 90 people who may be affected. FNB Home Loans has nearly 1 000 employees.

“It is too early to say how many affected staff will ultimately leave FNB. Our first objective is to redeploy people into other positions in the wider banking group. The process should be completed in early 2012,” he said.

Absa declined to give details, but Louis von Zeuner, the deputy group chief executive, said: “We have no mass retrenchment programme in place.”

Instead Absa continued to focus on programmes that enhanced efficiencies and effectiveness by reducing duplication, he said.

The looming cuts follow the slump in the residential property market, which resulted in a contraction in the number and value of home loans approved and granted.

This was highlighted last week by Funeka Ntombela, the director of home loans at Standard Bank, who said the market was worth R350 billion in 2006/07 but “if we are lucky” would be worth R120bn this year.

FNB last month confirmed its monthly volume of home loan applications had fallen to 10 000 from between 30 000 and 35 000 at the peak of the property boom in 2006, while Absa had realigned its lending strategy because of the prevailing operating environment, resulting in a shift in the bank’s focus from volume to value.

Kleynhans denied FNB Home Loans planned to downscale the positions and wage packages of staff but confirmed it was “looking at more rewarding variable remuneration structures”.

He said the group wanted to find solutions where staff could have open career paths, which often meant they would work in different parts of the bank.

Standard Bank’s Ntombela said the group continued to manage its costs but neither the group nor home loans was planning any retrenchments.

Ntombela stressed that Standard Bank was committed to home loan business because it was a service customers needed. She added that it had signed agreements with mortgage originators despite taking a view to deal directly with its customers to give the latter a choice and because it believed there was “room for both”.

Keith Hutchinson, the managing executive of Nedbank Retail Secured Lending, said Nedbank Home Loans viewed its staff as vital contributors to the bank’s overall success and remained focused on strengthening its relative competitive position.

It therefore did not currently envisage retrenchments in its home loans department, he said, adding that the department was well positioned to manage the challenges of the current economic conditions.

Source: Business Report