Nedbank sheds retail banking staff

Nedbank has reduced the number of staff employed in its retail and business banking (RBB) segment by nearly 500 over the past year, with most reduction happening in the first six months of 2016. This is 2.3% of this division’s head count.

This “head count optimisation” hasn’t required a formal Section 189 process – it’s primarily being achieved through natural attrition. In other words, certain newly vacated roles aren’t being replaced.

Retail banking is particularly labour intensive and staff costs comprise 46% of total group expenses. Staff costs in RBB were R3.776 billion in H1 2017, versus R3.674 billion last year – up 2.7%. What it describes as “residual organic costs” in RBB increased just 3.6%. Despite these efforts, RBB’s efficiency ratio increased to 63.4 in H1 2017 (H1 2016: 62.8).

Overall, the group says staff-related costs increased 3.6% yearon-year, well below expense growth of 5%. The drivers were the “8.4% growth in remuneration and other staff costs, including an average annual salary increase of 6.5%”, a “reduction in staff numbers since December 2016” as well as “a 7.6% decrease in short- and long-term incentives”.

These jobs are being lost against the backdrop of increased digitisation, which is driving more self service. Teller activity, for example, is down 6% from the same period last year. The amount of self-service deposits as a percentage of the total has more than doubled in the past two years. Nedbank says “altogether 36 services are planned for enablement through digital channels by February 2018, which will enable further self-service for clients”

Nedbank has set an aggressive target of reducing its total branch floor space by over 30 000m2 by 2020. Since 2014, it’s already achieved 24 819m2 (as at June 30). The number of branches, i.e. excluding personal loans outlets or those in other retailers, has increased by 12 over that period.

Hilton Tarrant works at immedia