Bidvest Bank has served its staff with a notice of possible retrenchments. The group said it has been negatively impacted by the Covid-19 pandemic, and to ensure its long-term sustainability is reviewing its operations to realign the bank to the current economic climate.
It anticipates that over 400 employees in its personal banking, business banking and support divisions will be affected. They will be notified by the end of October and serve notice in November.
In a letter to employees dated August 28, it said this has been necessitated by reduced revenues being experienced, taking into account the reduced demand for certain products and services.
“The negative impact in relation to [the] travel, tourism, leisure and hospitality industries arising from the Covid-19 pandemic and general economic factors appear to still be ongoing and currently, prospects of these industries showing any improvement in the short term remain remote, which in turn impacts extensively on our business due to our focus on forex and related products,” reads the letter.
The bank will dedicate the next month to consultations as per statutory requirements and the time period set out in Section 189A of the Labour Relations Act and the bank’s retrenchment policy.
The bank said it is repositioning to include the move to virtual banking.
Financial director and acting MD Thinus Liebenberg said the pandemic has accelerated the demand for digital access to financial services and the decreasing need for traditional ways of interacting with banks and other service providers.
“Bidvest Bank has also experienced a significant impact on its financial results and revenues over the last few months as a result of the Covid-19 pandemic, further compounded by general economic environment,” said Liebenberg.
“A strong digital platform in the current environment is going to be crucial to remain sustainable and competitive.”
He said the changes will result in the optimising of the branch network as well as the support areas of the bank, which could culminate in a retrenchment process.
“Taking into account the nature of the organisational changes the bank is currently considering … the bank anticipates approximately 400 employees that may be retrenched as a result,” reads the letter.
There are approximately 1 037 permanent employees within the bank, some 651 of whom are in the personal banking, business banking and support divisions. In the past year 12 retrenchments have taken place.
“As a bank, we will conduct a people-centred process and will engage and fully support colleagues during a formal consultation period,” said Liebenberg.
Retrenched employees will receive counselling and financial advice through appropriate service providers.
Denker Capital executive director and portfolio manager Kokkie Kooyman said Covid-19 has accelerated consumer behaviour towards digital banking and it can be expected that more branches will close in the future, but international banks in the UK and SA have announced that they will not implement retrenchments until the Covid-19-induced lockdown is over.
Diminishing need for branches
“What we are expecting now, post-Covid-19, is for more banks to accelerate branch closures. However because Bidvest is really small, I suppose it doesn’t need branches that much, as most banks mostly use branches for deposits and even that has moved digitally,” Kooyman said.
He advises those working in the sector to upskill.
“I suggest that those working in the sector become technologically switched on and do as many courses in digitalisation as possible to make [themselves] irreplaceable,” Kooyman said.
He added that banks in Europe have already announced that they will close a third of their branches.
“We expect to see this throughout the world and in South Africa as well.”