Indications have emerged that more employees of the
Deposit Money Banks may lose their jobs in the months ahead following series of
rationalisation programmes being carried out by the banks.
Reliable sources in the banking
sector told our correspondent on Thursday that the recent sackings of workers
were meant to reduce overheads in the banks.
One of the sources, who preferred not
to be mentioned because of the sensitive nature of the subject, told our
correspondent that some of the banks would sack more workers next month
following another round of appraisals.
“The sacking will be a continuous
thing for now. At least, till the banking sector gets its feet back. More
bankers will lose their jobs next month after another set of appraisals. The
appraisals are done in some banks quarterly, while some banks do it every four
months,” the source said.
A top executive in one of the banks
that recently merged with another told our correspondent that the mass
retrenchment by the banks was aimed at reducing overheads.
“The merger increased the scale and
size of the banks, which also increased their costs to income ratio. The
sensible thing to do is to cut cost unless the banks will run out of profit.
So, closing some branches that are not making profit is inevitable. When you
close such branches, you also retrench the staff involved,” he explained.
However, analysts have said that
there are ways to rationalise without necessarily sacking workers enmass.
The Managing Director, Sotice
Investment Company Limited, Mr. Adedayo Toluwase, said indiscriminate firing of
bank employees, especially acquired banks, opposed the principle of fairness in
corporate governance.
He said, “The continuous action of
random sacking of staff from acquired institutions by the acquiring
institutions contradicts the principle of equity and fairness in corporate
governance. This also tends to erode corporate goodwill for the acquirer
institution over time.
“It is also sad that many employees
in Nigeria are not unaware of the implications of the employment contracts they
carry and the scheme of arrangements of a standard merger/acquisition document,
which is legally binding on the acquiring institution.”
Mainstreet Bank Limited, formerly
Afribank Nigeria Plc, last week terminated the employment of 800 of its
workers, including 650 members of the Association of Senior Staff of Banks,
Insurance and Financial Institutions, a unit of the Trade Union Congress of
Nigeria.
Also, Sterling Bank Plc has sacked
400 workers in a systematic mass retrenchment aimed at reducing overheads.
The News
Agency of Nigeria reported
that 97 per cent of the retrenched workers were former members of staff of
Equatorial Trust Bank Limited, which was acquired by Sterling Bank.
In the same vein, First City Monument
Bank recently sacked about 30 per cent of FinBank Plc employees following the
merger of both institutions.
The Group Managing Director of the
bank, Mr. Ladi Balogun, had said that FCMB was trying to achieve the synergies
anticipated in the merger by closing 44 of the existing 183 branches of
Finbank, a development that created 550 redundancies as a result of overlapping
functions.