You are here: HomeNews2016 06 02Article 444164

Business News of Thursday, 2 June 2016

Source: citifmonline.com

GCB layoff negotiations close to completion

Negotiations between workers of GCB and management over moves by the bank to lay off hundreds of workers is close to completion.

Persons familiar with the matter have told Citi Business News the negotiations, which largely centre around the exit packages to be given to workers, who will be affected by the layoff are likely to end by next month.

The bank in May 2015 confirmed to Citi Business News that between three and five hundred of its workers will be laid off as part of a restructuring exercise to make the bank competitive. GCB Bank in 2014 recorded strong financial performance, consolidating its position as one of the top-performing banks in the country.

Its profit before tax shot up to 382,436 million cedis for 2014 from the 311,233 million cedis it recorded in 2013. Its profit after tax was 270,057 million cedis for 2014 from the 223,508 million cedis it recorded in 2013. Deposits of customers increased from the 2,630,283 billion cedis recorded in 2013 to 3,078,071 billion cedis recorded in 2014.

The bank’s total income increased by about 29% to GHC731million, which was driven by volume growth across all business lines namely consumer and corporate banking and treasury while total assets have increased by 24.8% to GHC4,232,819 billion driven by growth in loans and advances and investment.

Initial reports from the bank had revealed that about 500 workers of the bank were to be affected in a move that is expected to reduce its rising operational cost of which a large portion is used in paying salaries and allowances of staff.

But new reports suggest this figure will reduce drastically to below 200. The staff strength of the bank currently is above 2200. GCB Bank Limited commenced the layoff processes in 2014 under the leadership of the bank’s immediate past Managing Director Simon Dornoo.

Speaking to Citi Business News in 2015 on the matter Simon Dornoo said “the bank has changed over the years we have invested a lot in technology and these basically has been driven by the fact that there is competitive pressure, regulatory pressure, rising operating cost and to sustain our competitive position we have to restructure the bank and if that means we have to reorganize our labour force and if that is what is needed to sustain or keep the bank competitive we will have to do that.

Whatever we have to do about the restructuring we will follow due process.”

The negotiations which have dragged on for a while follows heavy resistance from junior workers of the bank who are unhappy with the exit packages being offered them.