Bidvest Bank’s staff cuts emphasise changes in banking sector

In yet another indication of the way that SA’s traditional banks will need to continue evolving towards leaner and meaner digitally focuses business models, particularly in the wake of the pandemic, Bidvest Bank announced in the past week that it intends retrenching around 400 employees.

While this number may seem small in the context of the big banks, this is a significant 38% of Bidvest Bank’s total staff complement of 1 037.

Three divisions will be impacted

Of this figure, 651 employees work in the divisions that are expected to be affected by the retrenchments – personal banking, business banking and support services.

The bank said lockdown restrictions on tourism and hospitality industries had a devastating effect on its business, which has a strong focuses on foreign exchange and related products. It has also experienced reduced demand for certain other products and services.

“The negative impact in relation to 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,” management said in a letter to staff.

Bidvest is reviewing all operations

Retrenchments are aimed at ensuring the bank’s sustainability in a tough economic climate, the letter adds.

“As a direct result of the pandemic the Bidvest Group, like most companies, is reviewing its operations across the group to ensure not just our short-term survival but long-term sustainability,” SABC News quotes the Chairman of the Bidvest Group, Boneng Mohale, as saying.

“Our first thought is always with the employees during this difficult time. This is but one part of the downsizing of our entire business. The bank has been repositioned to virtual banking and this has been approved by both the Bidvest Group Excco and Bank board of directors.”

Digital access to financial services

Acting MD Thinus Liebenberg said the pandemic has accelerated the demand for digital access to financial services and decreased the 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.”

A number of dedicated digital banks have begun competing in the SA banking space, with TymeBank, in particular, making inroads.