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Johannesburg - FirstRand [JSE:FSR] plans to close branches and cut jobs at its South African retail-banking unit as the continent’s biggest lender by market value responds to an economy on the brink of a recession.
Almost 600 positions will be lost at First National Bank, while more than 500 people at the Johannesburg-based company may apply for other roles, said Vanessa Hattingh, a representative from Sasbo, a labour union which acts on behalf of more than 50% of FNB’s staff. About 10% of the bank’s branches will be affected, with 40 branches closing and another 31 reducing staff, she said.
The process, started in February, is being done to remove duplication and improve efficiency as more clients use digital banking channels such as the Internet and mobile phones to transact and FNB increases the use of automation, the company said in an emailed response to questions. “No full-service branches are affected and FNB is continuing to extend its network of ATMs.”
Unemployment rate
Africa’s most-industrialised economy has struggled to reduce an employment rate that hovers around 25%, the highest of more than 60 countries tracked by Bloomberg. Growth in the economy is forecast to slow to less than 1% this year, knocked by the worst drought in more than a century, falling commodity prices and weak demand from its biggest export market, China.
FirstRand has cut lending this year and said on March 8 that its growth rate was likely to decline this year. The lender has 716 branches and more than 33 000 employees in South Africa. The stock closed 0.02% lower at R43.75 on Monday, reversing an earlier gain of as much as 1.8%.
“Unfortunately the use of biometrics and electronic channels can mean job losses,” Hattingh said. “For the banking industry, the broader economic issues are real. Retrenchments aren’t good for the people or the country.”
