Equity Group CEO James Mwangi addresses mass layoffs

Equity Bank Group CEO Dr. James Mwangi has addressed concerns following reports of massive layoffs at the bank, that saw the lender send home close to 200 of its employees.

Speaking to Citizen TV during the announcement of the bank's quarter one results on Thursday, Dr. Mwangi noted that this was as a result of a conduct audit that all employees were subjected to, following the loss of Ksh.1.5 billion at the bank.

“I want to encourage customers not to compromise staff because you risk their jobs, because we have zero tolerance on anybody who is conflicted,” he said.

The lender has since committed to releasing a toll-free number to allow customers to share their frustrations about staff, who seemingly get in the way of service delivery.

“Customers should be served and enabled to realise their dreams without any inhibition whatsoever. So there is no obligation whatsoever for any customer to buy a staff lunch or to give them a tip because essentially we are not on the look-out and that jeopardises the position of a staff,” stated Dr. Mwangi.

Dr. Mwangi was speaking during the release of the bank's quarter one results, where the lender's earnings dropped to Ksh.15.4 billion on the back of high inflation and currency depreciation in South Sudan.

In the period ending March, the lender saw customer deposits increase by 7 percent to Ksh.1.32 trillion, allowing them to disburse Ksh.804.7 billion in credit, a 3 percent increase.

In the first quarter of the year, the Kenyan business showed strong recovery, outpacing the regional businesses in key metrics, contributing 53% to the lender's deposit growth, 52 percent growth to the loan book, and 51 percent to revenue growth among others.

“South Sudan is going through a very difficult period, with the stoppage of exports of oil and as a result its currency has significantly lost value against the US dollar and the Kenya shilling, so inflation has been high,” noted Dr. Mwangi.

“What has happened is there is an inflationary reporting that we did last year which contributed Ksh.3 billion but this year the inflation has remained stable so there is nothing to register in South Sudan. So it's not that profit has gone down it's up by 8 percent but when you add the inflation accounting last year in South Sudan it looks like it has gone down by 4%.”

Despite an improved performance by the Kenyan business, it continued to register high levels on non-performing loans at 19 percent, 200 basis points above the industry average, largely contributed to by corporate loans, which stood at 26.7% in March, as well as MSME loans.

“We had taken a position that we will be patient with the companies until we started realising that the companies are running out so we started a recovery process and you know in Kenya recovery people go to court, so we have not been very successful in recovery but we have been very successful in every case that has gone to court so it's just a question of time,” said Dr. Mwangi.

The future of Equity Bank is brighter than the present, that is the assurance to investors and shareholders from the Group CEO, who says that the prospect of the region remains positive.