Wave of dismissals as Nigerian banks lay off thousands
Lagos is becoming likeLondon. There’s nothing positive about this development, though, as it is limited to banks’ propensity to lay off thousands of employees. The revolution that has transformed Nigeria’s banking sector, following the stress tests imposed by the Central Bank, seems to have swept away long-cherished job security as well.
The bulk of the retrenchments seem to be at the nationalised banks – Spring Bank, Bank PHB and Afribank – that last year were found to be technically insolvent and lost their license after failing to find a partner to rescue them.
Another two banks that did not pass the Central Bank’s Audit found partners to take them over: Intercontinental found Access Bank and Oceanic found Ecobank. The two healthy banks have now found, surprise surprise, that the two banks they have taken control of were burdened with massive non performing loans and a vast number of employees which they now plan to trim.
Ecobank,West Africa’s largest financial institution, has so far announced 400 redundancies but sources say there are more to come. The lay-offs are “part of the Ecobank group strategy designed to consolidate and optimise its operations,” says Ola Akinnola, head of communications at EcobankNigeria, in order to create “a highly efficient structure.” Sunday Salako, president of the Association of senior staff of banks, insurance and financial institutions, confirmed that Ecobank would proceed with a further retrenchment exercise and said it was “unrealistic to expect merged banks not to rationalise and lay off staff.”
Access Bank has officially laid off 1,100 Intercontinental employees due to the closure of unprofitable branches but Nigerian reports put the number at over 1,500. This followed a new appraisal system to get rid of underperforming staff, Access managing director Aigboje Aig-Imoukhuede says: “We set a minimum threshold in terms of performance and you will be sacked if you don’t meet the minimum target set.” Affected staff get “generous packages”, he added, which did not stop the unions picketing branches in the capital Abuja in protest at the cuts, while some employees have gone as far as petitioning the Central Bank of Nigeria.
“I expected job losses from the M&A but I did not think it would be that serious,” says John Osamede, a Nigerian financial analyst. “But from we are now hearing about Intercontinental Bank, it means the bailed-out banks are still in bad shape and many of their staff will have to be sacked as part of cost-cutting measures by the new management.”
