Cavmont Bank has publicly announced that the bank will be restructuring its operations in Zambia that will lead to some branch mergers while other will be closed to streamline its operations. A review of the branches approved by the Bank of Zambia – BOZ for closure is that 3 out of 4 are based in rural areas of Zambia.
The banks Head of Communication and Customer Services Chilunga Puta says the restructuring of the Bank and its centralizing of processes to meet international standards will result in some roles to be cut while some jobs will be moved into the central processing center.
Puta has told the Zambian Business Times (ZBT) in an exclusive interview that the exact number of job losses is not yet known as the Bank is still in consultations with various stakeholders but that the loses are less than what is being projected on some media platforms.
She told ZBT that once the process is finalized, the number will be shared with relevant stakeholders while workers likely to be affected will be compensated accordingly.
“What people do not understand is that Zambia is becoming more digitalized and we are going to witness a lot of back office function becoming more centralized. Cavmont Bank is a Zambian bank that strives to meet international standards, but in order to do that, we have decided to centralize our processes so that things begin to happen a lot faster, make the bank more agile and smoother for our customers,” she said.
The Bank said that it sought approval from the Bank of Zambia to ensure full compliance with statutory regulations and approval was granted for this restructure. The Bank also met with the representative trade unions such as the Zambia Union of Financial Institution and Allied Workers (ZUFIAW) and the Ministry of Labor and Social Security to inform them of the intended restructure and the regrettable impact the process on jobs.
Meanwhile, Bankers’ Association of Zambia has defended the decision by Cavmont Bank to restructure and reposition itself which the association says should not cause panic among people.
BAZ Executive Director Leonard Mwanza says every business needs to restructure itself in order to stay relevant in its business sector despite the negative outcomes that may arise from the process.
The Bank’s move to restructure has seen the closure of 4 of its branches that include Lusaka’s industrial area branch, Mpulungu, Mwense and Mufumbwe branches which will result in job cuts.
Earlier this year, the Board of Directors of Cavmont Capital Holdings Zambia issued a profit warning to the market stating that that the Earnings Per Share – EPS for the six-month period to 31 December 2018 was expected to be about 5,655% lower as compared to that for the six-month period to 31 December 2017.
In a profit warning note availed to the Zambian Business Times – ZBT signed by company secretary, Rita Mapara-Ndhlovu, Cavmont stated that the decrease in profitability was attributed to increased impairment charges and operating expenses. Impairment charges for the period were higher mainly on account of the implementation of IFRS 9 on 1 July 2018, which increased impairment provisions across the entire in- dustry.
Mapara-Ndhlovu further stated that operating expenses increased by K19.5m (about US$1.6 million) year-on-year on the back of increased investment in infrastructure and in hiring of staff in order to upskill the group’s workforce which included the on-boarding of key new human capital resources as a performance enhancement strategy and to remain relevant within the industry.
