–HBL serves early retirement to 144 employees
KARACHI: The Habib Bank Limited (HBL) on Tuesday categorically denied reports regarding the retrenchment of 2,000 employees, but claimed that it has served early retirement to the extra-staff of the bank, over 55 years of age, or those who had served the bank for more than 25 years, said HBL spokesperson and Marketing Director Naveed Asghar.
Talking to Pakistan Today, Naveed said, “The bank has retired 144 employees who were above 55 years old and had served the bank for 25 years.” The bank will pay their all dues and funds. “Giving it a perception to lay-off policy of the bank will be wrong,” he asserted.
The Marketing director further claimed that the bank has no plan to lay-off its 2,000 employees and rubbished the report as a rumour.
Last week, the HBL had retired the 144 employees in a single move that created panic among the employees, with some of the HBL unions holding protests outside the Karachi Press Club last Friday.
Employees of the HBL, representing different employees’ unions, had protested against the cost-cutting policy of the HBL, claiming that the bank was planning to retrench more than 2000 employees of the bank.
Protesters had been holding the placards against the current management of the HBL, as they demanded the prime minister, chief justice, State Bank of Pakistan governor and Prince Karim Aga Khan to intervene and help the employees in saving their jobs.
The sources at the HBL said that this cost-cutting drive came into play after the bank paid a hefty penalty to the American regulator in New York. The HBL management started laying-off employees and some 144 employees were called in with choices to either sign an early retirement or face job terminations. However, the majority of these employees were in 45-52 age groups.
Based on HBL’s December 2016 audited accounts, the bank had a workforce of 17,303 (largest in the sector), with an average annual staff cost of Rs 1.4 million per employee annually, which is also one of the highest in the industry.
An analyst at Taurus Securities said, “If the rumours regarding laying-off another 2,000 employees are true, (incorporating YTD results), the overall savings from the layoffs on the bank’s earnings to be in the range of Rs 2.00-2.50/share (pre-tax) during the calendar year 2018 and beyond.
The above should not come as a surprise given the challenges being faced by the bank’s management to manage its CAR and grow its business at the same time.
Resultantly, the analyst attributed the same to be a bold step taken by the HBL management to offload pressure on its bottom-line and reserves by implementing serious and much-needed cost-cutting measures.
