By Lehlohonolo Lehana.
African Bank is entering into Section 189A consultations with the unions that could result in cutting up to 1 200 jobs and closing 90 branches.
The restructuring aims to curb costs following a recent acquisition spree and mounting financial losses.
The bank accumulated a R624 million half-year loss and rising credit impairments.
To top it off, the bank aims to consolidate and has delayed its planned JSE Initial Public Offering (IPO) to 2030, due to recent acquisition costs outpacing revenue.
The bank said it had reached a point where employee-related costs also needed to be reviewed.
“The action has not been taken lightly and is a direct result of our current business realities,” the bank said in a statement.
Interim group CEO Zweli Manyathi acknowledged the impact the process could have on employees but insisted it was necessary to secure the bank’s long-term future.
“We understand that this is a difficult period for the business and our people. However, it is necessary for the future sustainability of the business,” said Manyathi.
Manyathi moved to reassure customers, investors and other stakeholders that it remains financially stable, saying it is capitalised above minimum regulatory requirements and has sufficient liquidity to meet its obligations.
The consultation process is expected to continue in the coming weeks as the bank and the unions engage on measures to mitigate the impact on workers.