Standard Bank has made a proposal to meet some of the demands of Sasbo, the finance union, over retrenchments, the Labour Court in Johannesburg heard on Thursday.
Sasbo was seeking an urgent interdict against Standard Bank to stop it firing staff.
Standard Bank’s legal team said on Thursday afternoon they were waiting for a letter to be drafted, which would propose to extend consultations with the union over the
planned retrenchment of 1 145 permanent employees and 600 contract staff in South Africa.
In terms of the proposal, the bank would by Tuesday make available information sought by Sasbo and hold further consultations with the union on November 23.
“The proposal meets substantially [Sasbo’s demands],” said Standard Bank’s counsel.
The union had asked for some time to consider the proposal, and Judge Robert Le Grange gave them until after 3.00pm on Thursday.
“We’re simply seeking an order compelling Standard Bank to comply [with the law] … We’re not asking for an arm and a leg,” said counsel for Sasbo.
The bank had previously said retrenchments were necessary for its long-term sustainability.
Sasbo represents 15 400 Standard Bank employees.
Revenue was under pressure
Previously, the Mail and Guardian reported that analyst Tracy Brodziak said that revenue was under pressure in the banking sector — interest income was down and the economy shaky.
In August, Standard Bank — the largest employer of the big four banks — released its interim results, which showed that its headline earnings had increased by 11% to R5,9-billion.
However, the net interest income was down by 12% while costs grew by 15%. Staff costs alone account for more than half of the bank’s total operating expense.
“It’s not specific to banks but a lot of sectors have been giving way over inflation increases. While it would be much better to cut these increases, they end up having to get rid of staff,” said Brodziak. “At the end of the day companies have to adjust.”
The announcement of retrenchments may only be the beginning. Brodziak said that if the economy stayed as it was now she would be surprised if the other banks didn’t start retrenching people: “The cost-to-income ratio is going up dramatically and it can’t keep doing that. At some point the banks are going have to look at the situation.”
The cost-to-income ratio is the primary measure of efficiency. At 58,1%, Standard Bank’s is the highest of the four major banks, with FirstRand at 57%, Nedbank 55% and Absa 54%.
Of the estimated 2 100 Standard Bank jobs that will be cut, 1 200 are permanent positions, 300 are London-based posts and 600 are contractors. The majority of these (70%) are managerial and executive positions, while the remainder is made up of clerical and general posts. — Sapa and M&G reporter