More Malaysians Could Be Losing Jobs

More Malaysians Could Be Losing Jobs

More Malaysians could be losing their jobs, as banks take measures to become more cost-efficient amid the current economic volatility, with the focus on reducing their workforce to an optimal level.

RAM Ratings co-head of financial institution ratings Wong Yin Ching told The Star that banks are taking measures to reduce their respective workforce with greater urgency now, given the softer earnings outlook amid a challenging economic environment with sluggish loans growth and continued margin depression.

Experts believe that banks that are implementing job cuts are making the most of the current capital market weakness to optimise their staff strength and get their expenses (cost-income ratios) right.

RHB Capital Bhd (RHBCap) is the most recent Malaysian banking group to embark on a rightsizing exercise by offering its 17,500 employees a career transition scheme (CTS). However, it does not have a definitive target on the number of staff it would be releasing under the scheme.

Meanwhile, CIMB Group Holdings Bhd was the first local bank in recent times to rationalise its staff when it completed an RM443.3mil mutual separation scheme (MSS) in July.

Affin Holdings Bhd’s investment banking arm, Affin Hwang Capital, is currently undergoing a rationalisation exercise, following the merger between the investment banking businesses of both Affin and HwangDBS (M) Bhd, which took place in 2014.

Not all is gloom and doom for the banking industry. Some banks appear to be adopting a wait-and-see attitude, while others said there were no plans to slash jobs.

A spokesperson at Alliance Bank Bhd said it would continue to assess skill sets and staffing requirements to support the business plans and direction.

Hong Leong Bank Bhd CEO KK Tan said despite a challenging operating environment, they were able to sustain its asset quality position and that it was business as usual.

Malayan Banking Bhd group president and CEO Datuk Abdul Farid Alias said earlier this month that it would not be cutting staff.

Each banking group will have its own reasons for downsizing, but the motivation to do so appears to be greater than ever for banks that were “overweight” with higher-cost employees.

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