Bank employees get 7pc salary increase

Kenya Bankers Association (KBA) CEO Habil Olaka. FILE PHOTO | NMG

Employees in the banking sector are set for a seven percent salary increase effective September, following the signing of a new collective bargaining agreement (CBA).

An increment of four percent will be backdated to March 2020, while a three percent raise will be backdated to March this year.

The Kenya Bankers Association (KBA) has said the deal will benefit over 20,000 unionisable employees in the industry.

The pay rise is a major boost for the workers after banks froze salary increases last year following depressed economic activity at the onset of the Covid-19 pandemic.

Some lenders also closed branches, laid off staff and shifted to digital services to cut back on costs of operations.

According to Central Bank of Kenya (CBK) data, banks took a Sh46 billion hit on their pre-tax earnings last year to Sh112.8 billion, hurt by a sharp rise in provisions for loan defaults.

However, the lenders have made a record Sh96.4 billion profit before tax in the first half of this year, supported by ongoing economic recovery.  

“We are pleased with the outcome of the union negotiations,” said Habil Olaka, KBA chief executive.

“Bank employees have been essential workers throughout this pandemic, and we thank them for their personal sacrifice and commitment to deliver uninterrupted services to the banking public.’’

The union negotiates salary increases each year and bankers have in the past received a six percent pay jump.

The number of staff employed in banks slightly dropped by 420, representing 1.3 percent, to 31,605 as at the end of December 31.

Lenders have rolled out digital banking platforms to cut costs, which has reduced the need for opening new branches and customer visits to the physical branches.