- Adverse financial condition of the bank led management to fire employees
- JS Bank cut down consumer banking business amid losses
In a recent move to save the bank from further losses, JS Bank has laid off 300 employees from their positions primarily in the Consumer and Retail Banking Segment. It is learnt from the reliable sources that Management of JS Bank has prepared a list of around 900 employees to be laid off. Around 300 employees have been immediately released from their duties while remaining will be handed over notice in the upcoming month.
JS Bank has incurred heavy losses in Consumer Banking Segment which led Bank to Post Net loss of Rs. 575 million in Half Year ending June-2019. Higher Provisioning Cost, Increased Operating cost as compared to peers and lower Net Interest Income led bank to post Loss. It is the first Loss for the bank in eight years.
A source privy to the matter mentioned on condition of anonymity that the bank has incurred major losses in Prime Minister Youth Loan Scheme launched during the tenure of Prime Minister Nawaz Sharif. JS Bank Ltd led the PM Initiative of Youth Loan. However, the scheme started struggling when Bad Loans start appearing. With significant disbursement in the scheme from JS Bank Ltd, Higher NPL ratio led bank to book heavy losses.
A female employee, who preferred to stay anonymous, said that workers had received emails two weeks back telling them what time to come in for the announcements. Human resources personnel thanked the employees for their service to the bank and said that deciding to make the layoffs had been difficult for the bank, the employee said. Majority of employees who are laid off are Contractual or hired by Third Party. In addition to Consumer banking segment, Axe also fell on Retail/Branch Banking segment, where Branches are forced to optimize their Staff ratio.
At December-2018 end, JS Bank had 4,626 employees with average per staff cost higher than most of its peers.
An HR personnel from JS Bank ltd has confirmed the development, as he said that a ‘small number’ of retail banking jobs have been terminated in a routine operational overhaul. He added that the terminated employees will be provided with ‘fair compensation packages’.