Bank workers live in fear as job losses continue
The wave of sacking that characterised
the banking sector a couple of years back has not abated as the axes
are dangling on more workers, ADEMOLA ALAWIYE writes:
Indications have emerged that more bank
workers will lose their jobs in 2014 following cost-cutting measures
about to be introduced by the deposit money banks in order to mitigate
the effects of some regulatory policies on their profitability.
Since the era of the global financial
crisis in the mid-2008 and the special audit test carried out on banks
by the Central Bank of Nigeria, the banking sector has witnessed a chain
of job losses estimated at more than 15,000 by industry watchers.
Our correspondent learnt that the recent
increase of Cash Reserve Ratio on public sector funds from 50 per cent
to 75 per cent, among other policies, was the main reason for embarking
on the staff rationalisation programme.
An investigation showed that while some
banks were considering ‘casualisation’ as an option, other banks
were
considering the establishment of more e-branches where transactions
would be made electronically without cash. The e-branches, our
correspondent learnt, will have only one bank official, who will assist
customers that are not literate.
Virtually all the banks in the sector
sacked their workers in 2013 in a bid to reduce cost and increase
profitability. Some banks also closed branches that could not break
even.
For instance, it was a black Christmas
for over 200 workers of the Enterprise Bank Limited and Keystone Bank
Limited as they were sacked some days to the festive period last year.
Mainstreet Bank Limited was reported to
have sacked 670 workers of the bank without due process. Diamond Bank
Plc sacked over 100 workers including all the union executives because
they demanded for their rights.
Since the completion of business
combination between Access Bank Plc and Intercontinental Bank Plc;
Ecobank Plc and Oceanic Bank International Plc; First City Monument Bank
Plc and Finbank Plc; with the emergence of Access Bank, Ecobank and
FCMB as core investors having consumed the three others, thousands of
workers in the sector have been laid off.
Reports stated that Access Bank sacked
1,110 in January, while Ecobank relieved over 1,850 workers on their pay
roll. The gale of sacking did not also elude a few less fortunate
employees of the GTBank and Skye Bank, but the actual figures could not
be ascertained by our correspondent at the time of filing this report.
Expressly, the CBN Governor, Mr. Lamido
Sanusi, had at the beginning of the current reform process admitted that
there would be job losses but the question then was whether it would be
on a net basis.
A memo from the CBN to the banks had said
the financial institutions should immediately submit action plans for
branch and staff rationalisation in order to “utilise some hidden
economies of scale” in their operations.
The banks, according to the memo signed
by Mr. Thompson Sunday, on behalf of the Director of Banking
Supervision, CBN, are also required to submit their action plans for
enhanced revenue generation and cost reduction.
The memo added, “Furthermore, we request
that you take the following steps immediately to check the dwindling
operating performance of the bank: immediately reduce executive and
other staff emoluments by at least 30 per cent and submit an action plan
for branch and staff rationalisation in order to utilise some hidden
economies of scale in the bank’s operations.”
A labour expert, Mr. Charles Anenih, said
that the number of job losses in the banking sector was becoming
alarming. “Job losses in the banking sector have risen more than any
other sector of the economy. It is unfortunate that people who are
supposed to be protecting the workers in the banking industry are the
ones calling for a reduced workforce.”
In the same vein, the Chief Executive
Officer, Jade Consultancy, a recruitment firm, Mrs. Jadesola Akinola,
said, “A lot of people have been thrown out of work without payment of
their benefits. Till today, some people have not recovered from the
shock they experienced as a result of their job losses.”
The Monetary Policy Committee recently
announced the increase in the CRR on all public sector deposits to 75
per cent, from 50 per cent.
The CRR is the volume of cash that the
banks have in their possession but must keep with the central bank and
is used to drain out excessive money from the system.
The CBN had last July expressed concern
over the excess liquidity in the balance sheets of the DMBs, and
subsequently imposed 50 per cent CRR on all government deposits with the
banks.
The decision, which came as a major shock
to the banks, made some of the lenders to record a marginal drop in
their third quarter profits.
For examples, United Bank for Africa Plc,
Access Bank Plc, Fidelity Bank Plc, Skye Bank Plc, Union Bank Plc and
Unity Bank Plc recorded lower nine-month profit after tax, compared to
the third quarter of the previous year.
While the increase in the CRR to 50 per
cent led to the sterilisation of over N1tn in public sector deposits,
analysts have said the latest increase is likely to lead to the
sterilisation of additional N600bn to N800bn.
According to them, it may also lead to a
marginal decline in the banks’ earnings and the anticipation of an
average increase in the cost of funds as competition among the banks for
funds intensifies, beginning from this quarter.
