African Bank has halted proposed retrenchments after being snowed under by applications for voluntary severance and early retirement packages, CEO Brian Riley said on Thursday.
In a bid to reach a sustainable cost base needed for its long-term strategy — including expanding to retail banking – the lender initiated consultations facilitated by the Commission for Conciliation, Mediation and Arbitration (CCMA) with the South African Society of Bank Officials (Sasbo) in May, when it offered the packages before moving on to retrenchments.
African Bank proposed cutting 650 of nearly 4,100 jobs following a decline in loan volumes, which Sasbo resisted.
The two parties abandoned consultations this week after African Bank received a high number of applications.
“The company is still in the process of evaluating some of the applications for the voluntary severance and retirement offer,” Riley said.
“We are already confident, however, that we have sufficient applications for the voluntary severance and retirement offer in the affected areas that the cost savings and other objectives of the bank have been met, without the need to progress to a … retrenchment process.”
Riley said African Bank would relay the financial effects of the process to the market shortly after August 7, when it anticipates completing the evaluation and acceptance of the applications. He declined to comment further.
Sasbo had not responded to questions by the time of going to print on Thursday.
Its assistant general secretary, Myan Soobramoney, issued a general statement saying the bank had agreed not to proceed with retrenchments at the third meeting between the union and the bank facilitated by the CCMA.
“This is a massive achievement for Sasbo and its members considering that as many as 652 employees were initially on the cutting board,” he said.