Big four bank Standard Bank has quashed rumours going around its IT department that it plans to retrench a large number of staff in the unit.
Trade union Solidarity last week said it had learnt the bank was planning to retrench a large number of employees in its IT division, which would include permanent and contract staff. It heard that hundreds of jobs could be affected.
However, Standard Bank, which employs more than 51 000 people across its operations, says it has no "immediate intention" to retrench any of its IT employees, either permanent or contract employees. However, the group is facing continued cost pressure, it recently said.
The bank adds that the structure of its IT departments will be reviewed as markets and competition change, as this forms part of remaining competitive.
Concerning
Solidarity spokesperson Moira-Marie Kloppers says some of its members contacted the union with concerns that the bank could be retrenching a large number of its IT staff.
Spokesman Johan Kruger says the speculation indicated that a few hundred staff members could be affected as contracts would not be renewed, and permanent staff would be let go. He says "it is rumoured that Standard Bank is going to outsource a large portion of its IT operations to India".
The rumours follow a recent restructuring at rival Absa that saw fewer than 30 staff members being left without a job, after a move earlier this year in which 1 600 IT staff were told to reapply for their jobs.
Kloppers says Standard Bank has denied any retrenchments, but Solidarity will keep an eye on any developments.
The bank's rebuttal is good news for the union and its members, as it is now on record as saying it will not retrench staff, which will give Solidarity a strong legal position should retrenchments go ahead, says Kloppers.
Solidarity members have not received any official notification of job cuts, says Kloppers. She adds that it is sad that the bank did not immediately quash the rumours internally as this sort of speculation causes a lot of uncertainty within the company.
Periodic review
Standard Bank, which spent R1.5 billion on IT in the first half of the year, says it is committed to constantly improving its service to its clients and considers IT investment a crucial component of growing its business, serving its customers and delivering to its shareholders.
"While Standard Bank takes its responsibility to develop and nurture IT skills seriously, the nature and structure of our IT departments will be reviewed as markets and competition change. This we consider to be a prudent part of operating a business and remaining competitive."
In its most recent results, it says it will continue to focus on its cost base "as the current level of cost growth may prove unaffordable given softening revenue growth rates," it says. The bank adds that upward pressure placed on costs, as a result of being on an accelerated growth path in some of its operations; having to overhaul legacy IT systems; and increasing regulatory and compliance pressures will remain challenging.
In the six months to June, the bank grew income 15% as a result of strong net interest income growth of 18% and good non-interest revenue growth of 13%. Operating expenses increased 17% compared with the first half of last year and staff costs grew 16%.
Fixed remuneration grew 14% due to annual inflationary increases and an increased number of client-facing staff in the rest of Africa, while variable remuneration increased a percent.
Other staff costs increased due to project staff employed during the first half, especially in operational risk and compliance areas, as well as exit costs incurred in operations outside of Africa as it continues to scale down activities consistent with its tightened strategy.
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