Thousands may lose jobs in RHB-AmBank merger

Economists suggest that the new entity retrain staff to work in new growth sectors.

PETALING JAYA: Two economists have warned that the impending merger of RHB Bank Berhad and AMMB Holdings Berhad (AmBank) could see thousands losing their jobs and unable to gain new employment.

Yeah Kim Leng, a professor at Sunway University Business School, said job cuts under the current economic climate would cause problems to those laid off.

“Even though the economy is improving, it is not at a rate that can generate sufficient employment,” he told FMT. “There will be job challenges.”

However, both Yeah and Hoo Kee Ping, who is the author of several books on economics, said most of the affected workers could be retrained and reassigned to perform sales and online banking operations.

Hoo noted that tellers and other counter operators made up the majority of bank workers.

“But there is a need for a sales force in banks,” he said. “Most banks are now training their tellers to do sales.”

He urged the two banks to likewise train the affected workers for sales jobs or to offer them voluntary separation schemes that would be good enough to give them the means to invest in learning new skills.

He also said the workers could be retrained to work in new growth sectors with strong potential, such as financial technology (FinTech), online banking, wealth management and banking insurance investment.

On Thursday, RHB and AmBank announced that Bank Negara had given them approval to commence discussions for a proposed merger.

Sources quoted by Reuters said RHB would be the acquirer in the potential merger, estimated to be valued at about US$9 billion (RM38.59 billion).

Reuters added that the two banks had a combined headcount of roughly 25,000 employees.

Hoo said banks were already closing down branches in favour of online banking and were focusing their resources on FinTech. He added that more banks were expected to shed jobs in the years to come as they venture into FinTech.

He suggested that RHB and AmBank focus on the non-interest growth sector to reduce redundancies. This sector covers sales, online services and wealth and asset management.

Yeah advised bank employees made redundant by technology to look for new opportunities or to go into FinTech, saying there was a high demand for workers in that sector.

He also said it might not be necessary for RHB and AmBank to cut a large number of jobs if they decided to leverage on the skills and competence their employees had acquired.

“The new entity could focus on retail, corporate lending, private wealth management or Islamic banking,” he said, adding that it could also consider expanding its Islamic banking services overseas. -FMT