This article appeared on website Fin24 two days ago:
Johannesburg - Standard Bank Group [JSE:SBK], South Africa's largest bank by market value, has announced to staff that a fresh round of retrenchments will most likely hit managers based in its London and Johannesburg offices.
A confidential email was circulated on Tuesday afternoon signed by group CEO Jacko Maree and Sim Tshabalala, head of Standard Bank South Africa.
The email, which cited cost pressures for the staff reductions, was confirmed by Standard Bank spokesperson Ross Linstrom.
In its interim results to end-June Standard Bank said its earnings rose 11% to R5.9bn during the period under review on the back of improved market confidence and better returns from wealth management business Liberty Holdings [JSE:LBH]. The group also managed to nearly halve its impairment charge from R7bn in the first half of 2009 to R4bn.
The dividend was maintained at 141c.
At the release of the results in August, CEO Jacko Maree said Standard Bank wants to become a link between international capital markets and Africa, focusing specifically on the oil, gas, telecommunications, power, infrastructure and mining industries as well as the financial sector.
"If you want to play in this game you need a strong dollar balance sheet - not just a strong rand one," said Maree.
Okay, let me put on my bean counter cap for a moment and see if I understand this properly. Standard Bank, one of South Africa's "Big 4" banks, has just increased their earnings by 11% (inflation's been running at around 5%) at a time where South Africa (and, indeed, the world) is just beginning to eke its way out of the worst recession in living memory, and their profits for the six months ended June 2010 were R5.9 billion (yes, that's nine zeros). Yet somehow profits of just shy of a billion rand per month are not enough, since Standard Bank has announced that retrenchments are about to take place due to "cost pressures".
Now hang on a minute here. I've never been retrenched myself (thank God), but my mother has - twice - so I know what it's like for a family to be suddenly faced without income. And I've also been in in the painful position in my own business where, having just about exhausted the bond facility on my house to meet payroll expenses, I've had to tell an employee (whom I went to school with) that I could no longer keep him on. Even though all ended well for him since he was able to secure another job in which he could start immediately after leaving my employ, it was still the worst thing I've ever had to do in my life. But to want to even consider putting people out of work because you're "only" making a billion a month?
The market reacted yesterday by pushing Standard Bank's share price up by 1% on the news of the job cuts. So let me see if I get this one - shareholders actually profit from employees' misery? Don't get me wrong - I'm no socialist, and I have little time for the rantings of one Julius Malema (ANC Youth League president) about nationalisation. But if ever there was an example of capitalism gone wrong, here it is in black and white.
I wonder how CEO Jacko Maree sleeps at night. May God have mercy on his soul - right now, there ain't too much sitting in mine.
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