National Bank of Malawi plc, the country’s biggest commercial bank by assets and profitability, is set to lay off an undisclosed number of employees in what it has termed voluntary retirement to reduce its operational expenses.
In a circular dated February 25 2019 signed by head of human resources Charles Dulira, the Malawi Stock Exchange (MSE)-listed bank said the decision to lay off staff has been necessitated by recent changes in the operating environment that have made it necessary to reduce staff costs.
In the letter, the bank has asked employees interested to proceed on the voluntary retrenchment arrangement to express their interest to the Human Resources Division by March 8 2019.
In an interview yesterday, NBM plc corporate affairs manager Anne Magola confirmed that the bank had issued the communication, saying it is in response to what some employees had asked for.
She said: “I can confirm that the bank has issued the circular. This is because there are some members of staff who have been looking for an opportunity like this.
“They have actually requested the bank to let them go so that they venture into other endeavours.”
Magola was, however, non-committal on the number of employees to go, saying it would depend on the response and the budget for the bank.
She said: “The retrenchment package is attractive such that more people are expected to apply for the retrenchment, but they will be limited by the pot.”
According to the circular, the employees who will have their applications for voluntary retirement approved stand to get terminal benefits that will include severance allowance, notice pay, leave pay for accrued days, salary arrears for the applicable months of 2019 and a 40 percent lump sum from the pension scheme if one has clocked 60 years of age or has continuously worked for the bank for at least 20 years.
The bank says it would also make 2018 bonus payment to those eligible alongside other employees after the 2018 audited financial results are approved.
In the year ended December 31 2017, the bank registered a growth of 15 percent in the group profit after tax from K16.6 billion in the previous year to K19.15 billion and achieved an overall growth of 19 percent.
NBM plc sources indicated that the voluntary retrenchment arrangement was the first phase and that redundancy was pending in October this year.
But Magola could not be drawn into commenting on this.
NBM plc is a subsidiary of the dual-listed conglomerate Press Corporation Limited plc.