More job cuts
NATIONAL Commercial Bank Jamaica (NCB) let go another 54 jobs last Friday as part of a transformation plan that may result in even deeper cuts down the line.
The decision was made as part of the bank’s strategy to maintain a leading position in Jamaica while pursuing expansion in the Caribbean.
Indeed, the local environment for financial institutions has been somewhat volatile over the last three to four years, which has seen three government debt exchanges and a prolonged low-interest rate environment eat away at banks’ income while costs rise.
Even after closing 12 branches and agencies since 2008, including Red Hills Mall and Newport West branches last year, and cutting 41 jobs last September, following a reduction in staff by over 100 employees in early 2010, NCB’s cost to income ratio climbed from just under 48 per cent in the year ended September 30, 2009, to over 67 per cent last financial yaer. What’s more net dipped to $8.5 billion during the year ended September 30, 2013, from $10 billion in the previous financial year.
Profit started to climb again in its first quarter of the current financial year, but the 66.4 per cent cost to income ratio was still a far cry from where it was four years before.
“The transformation being pursued, while challenging in the short-term, will ensure NCB’s continued strength and viability, which will yield significant benefits for our customers, employees, shareholders and society at large over the medium to long-term,” said NCB in a press statement.
“For example, improvements in the effectiveness and efficiency of our business model will lower our cost of services and improve the timeliness in which we provide our services, allowing our customers to save money and time.” The 54 job positions ceased to exist as of January 31, leaving the total staff count across the banking group at 2,673.
“We acknowledge that this is a very difficult period and a challenging set of circumstances which is directly reflective of the complex and uncertain operating environment in which we must operate,” said NCB Group Managing Director Patrick Hylton.
The bank said its strategy entails an ongoing review of its operations and business processes, and “as we respond to emerging challenges and opportunities in the environment, further restructuring may become necessary”.