Tuesday, October 4, 2022

Banking sector employment down 3.8%

MAUN ÔÇô Employment in the banking sector has gone down by atleast close to four percent during 2015, the central bank, Bank of Botswana’s Annual supervisory report has shown. 

Data contained in the recently released report shows that employment in this sector declined by 3.4 percent from 5 205 in 2014 to 5 030 in 2015.

BoB said its commentary that the reduction in employment levels was due to a variety of reasons ranging from merging of some posts/restructuring exercise, voluntary exit and retirement (for two banks), to retrenchment by one bank following the automation of its banking system in order to increase operational efficiencies. 

The BoB report however state that in contrast, one bank increased its staff establishment by 82, while a marginal increase in employment was noted for four banks. 

A further look into the BoB supervisory report data shows that amongst the top four banks, Barclays Bank Botswana reduced its workforce from 1241 employees in 2014 to 1196 by the end of 2015 while Standard Chartered (Stanchart) also slashed its headcount from 959 to 815. The First National Bank Botswana (FNBB) on the other hand increased its staff by 82 from a workforce of 1140 in 2014 to 1222 in 2015. Stanbic Bank Botswana, a subsidiary of South Africa’s Standard Bank which introduced a new banking system in 2015 cut atleast 12 of its employees to reach its current 575 workforce while BancABC which is vying for a post on the top four is currently employing 268 employees against 254 employed in 2014. 

Meanwhile the BoB report further shows that the commercial banking sector continued to be characterised by oligopolistic market conditions, with the four largest banks accounting for approximately 79.2 percent (December 2014: 81 percent), 78.1 percent (December 2014: 79.4 percent) and 77.9 percent (December 2014: 80.1 percent) of total banking assets, total deposits and total loans and advances, respectively; a marginal decrease compared with the previous year. 

The central bank noted in its commentary that the degree of competitiveness in the banking sector is dependent upon the structure and size of the industry. 

“Competitiveness ranges from a highly competitive market with many banks of equal size, to uncompetitive monopolistic conditions, in which the industry is dominated by one bank. More often, banking markets are oligopolistic, the main feature of which is that a few players have market control, although not to the same extent as in the case of a monopolistic market condition. “, said BoB report. 

The bank further stated that the existence of a larger number of banks of comparable size in the market induces competitive pricing, which reduces the degree of market power and collusion among banks. 

“Market structure of many banking systems tends to be characterised by a few large banks (typically two to four banks), which account for the bulk of banking activities, including assets and liabilities. The Botswana banking sector has similar characteristics”, the bank said.


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