Search the Internet          Tips  Sites: Finance, Investment

StanChart plans to cut merged bank staff by 1,700

George Smith Alexander & Tamal Bandyopadhyay

Standard Chartered Bank is planning to trim its employee strength by at least 1,700 or around a third of the combined employee strength of Stanchart and Standard Chartered Grindlays Bank (formerly ANZ Grindlays Bank).

“The two banks’ total strength was 5,200 at the time of the acquisition (of ANZ Grindlays). We need between 3,300 and 3,500 employees to run the merged entity,” regional general manager of Standard Chartered group and CEO of Stanchart Grindlays Bank Jaspal S Bindra told Business Standard.

Stanchart Grindlays kicked off its third voluntary retirement scheme (VRS) today aiming at those staff members who are below 40 years of age or have put in less than 10 years of service. They are not eligible for any income tax benefit.

The first VRS (May 25-June 25) targeted both the banks and resulted in 574 staff members extending their hands for a golden handshake. The second VRS, which ran for a week between October 8 and 13, got a response from 390 applicants. "We may have a fourth VRS exclusively for the Standard Charterd non-managment staff as they had not participated in the last two VRS meant for only the Grindlays staff," Bindra said. He also made it clear that the bank would not retrench any employee.

The combined strength of the two banks has already come down from 5,200 to 4,175.

Together the two banks have around 1000 surplus non-management staff at present distributed between the Regional Management Centre (in Grindlays) and the Banking Services Divison (in Stanchart). This is a pool of employees not required for the banks at the moment and the management is expecting 50 per cent of the employees to quit by the end of this year.

The cut in flab is going hand in hand with a rationalisation of the branch network. Stanchart has sought the Reserve Bank of India's permission opening 10 new branches. Despite that, the total number of branches will remain at 60, the same as now, as it is planning to close seven branches while three branches are being sold.

"We expect the merger to be through by September-October 2002. The merged entity will be called Standard Chartered Bank. However, we will use the Grindlays brand for some of our products. It has a very good recall value. We are having internal brainstorming sessions on how to best use the Grindlays brand. May be some of our branches can be called Grindlays," said Bindra.

He also made it clear that the bank would continue to add new employees for its global processing centre at Chennai. "We are looking at taking around 1,400 people at the processing centre. We have already appointed 200," Bindra said.

So far, the staff-heavy Grindlays has seen the maximum churn out. The first VRS which saw the exit of 574 employees had 547 employees from Grindlays. Last week's VRS which closed on Saturday has seen 390 applications of which 290 were from Calcutta alone. The latest VRS, which opened today, can see the exit of 228 employees who are eligible for this scheme.

"Even though we are cutting the staff strength now, by 2005, the bank expects to add another 1000 to 2000 staff as it is ready to enter new areas like middle market mortgages," says Bindra.

He said the retail segment continues to be the engine of growth for the bank. "From the scratches in 1997, the retail business now accounts for 40 per cent of the total profit of the bank. In a few years time, it will go up to 60 per cent. The credit cards and the wealth management business (mutual funds, loans against shares, demat etc) contribute the maximum in this business," Bindra added.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report