Sack Wave In Banks

Sack Wave In Banks

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.

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.

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 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.”


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