Commercial banks in Kenya are going against the grid to hire more staff as other sectors resort to job cuts to survive the tough economy.
According to the Private Sector Performance Index by Stanbic Bank, firms extended the hiring freeze to a five-month high in August as both output and new orders recorded sharp falls.
"The downturn in sales led Kenyan companies to make renewed cuts to activity, employment and purchasing in August,'' the PMI report reads.
At least 10 local firms and multinationals including Twiga Chemicals, Buzeki, and Brookside among others have let go of at least 1,200 employees in the past six months due to the tightening economy.
Even so, an analysis of banks' financial results for the first six months of the year shows operation costs rose by an average of 20 per cent, largely on staff costs, legal fees, investments in technological innovations and acquisitions.
Kenya's top four banks including KCB Group, Equity Holdings, Co-operative and NCBA Bank spent an average of Sh198.7 billion, with a quarter of the amount covering staff costs.
Although some like KCB Group spent most of its operating budget which grew by 48 per cent to Sh40.4 billion in the first half on staff restructuring, it equally hired more staff compared to a similar period last year.
An official at the bank told the Star in confidence that it is targeting to add at least 3,000 employees in the current financial year to better serve its expanding clientele in East Africa.
KCB Group added 2,560 employees to its payroll last year following the acquisition of a controlling stake in the Democratic Republic of Congo’s Trust Merchant Bank (TMB) and fresh hiring across other units.
The transaction, which saw KCB acquire 85 percent in TMB mid-December last year, ultimately raised the workforce of the group to 11,098 in the year ended December from 8,538 in the previous year.
Equity Bank on the other hand saw its total operating income grow by 26.2 per cent to Sh82.9 billion as loan provisions rose by 32.6 per cent driven by higher inflation and currency weakening.
Dan Kibisu, a financial risk manager, believes it will have to hire more based on its expansion plan.
"Equity Bank is likely to hire more in the near future as it expands to DRC and other countries in the region. It cannot afford job cuts,'' Kibisu said.
Across 2022, Equity Group posted a 21 per cent year-on-year growth in full-time jobs to 11,148 while contract employees grew by 47 percent to 1,025.
Yesterday, NBCA Group reported having spent Sh34.4 billion in the first half of 2023 in its operations. Most of the funds were directed to expansion within the country.
Last month, it opened its 90th branch in Nairobi's Eastleigh area where it added close to 20 employees to its network.
The bank is planning to open 10 more branches in the country before the end of this year as the lender seeks to expand its presence nationwide.
