PROLOGUE There was a time when getting a bank job shortly after graduation from university was the dream of most Nigerian graduates, irrespective of discipline or qualification. Once that dream materialised, the young graduate would immediately envision a future of bliss and a steady climb up the ladder of riches and wealth.
After graduation, the hunt for the elusive bank job begins. For many who are specially lucky or privileged to have relations or parents who are ‘connected’ with the employers of labour in the banking industry, it becomes a smooth sail. For others who are not so lucky, they have to devise ingenious ways to help them clinch a juicy bank job.
There are lots of stories of how bank executives lured young girls fresh out of school with bank jobs paying fat salaries, but later, they became mistresses to the executives. There are also stories of how some of the bank executives demanded huge sums of money from prospective employees before they gave them a chance to participate in the job-screening exercise. As soon as the young graduate settled down with the job, evidence of a bright future began to unfold. Not any more.
That was Nigeria of the past. If anything, now the future looks bleak for most bank workers. More than 10,000 have been sent back to the labour market in a wave of retrenchment that has hit the industry. Indications are rife that many more will lose their jobs and worse still, whole branches are going to be closed down as part of measures aimed at reviving the ailing industry and to conserve funds. Today, a bank job has become a major source of heartache for most of the players in the industry.
Not only for the employees who may be directly affected by the exercise, bank employers also share in the pain, as they have to contend with organised labour unions breathing down their necks with ultimatums to reverse the sack exercise, or face wrath of the unions, and CBN wielding the big stick and insisting on house cleansing or sanctions.
Bank employees have more or less become an endangered species. They are no longer safe on the job. Any provocation could earn an unfortunate employee a sack letter. And even where there was no offence committed, the workers can lose their jobs just like that. There is a rapid depletion of the workforce.
Suddenly it does not matter any more what qualification is brandished, the dangling sack axe could fall on anyone in the industry at any time. Disillusionment has set in. The recent inglorious sack of eight chief executives and their directors show that the ill wind in the sector is blowing no one any good.
The blame for this ugly turnout of events which has literally thrown Nigerians into anguish, pain and misery, can be traced to years of irresponsibility on the part of the banking supervisory agencies and a government which could not create an enabling environment for honesty, diligence and hard work to thrive in the industry, thereby creating an industry which lost focus and began to serve selfish interests, all aimed at self aggrandisement. Professionalism was thrown to the wind as some bank workers freely engaged themselves in the worst practices.
All this set a time bomb ticking, which eventually detonated when heads began to roll as the industry plunged into recession, caused by rascality and anti-banking practices.The consequences of the ongoing purge are not only grave for the bank employees who have already been laid off or are on the verge of being laid off. Recent pronouncements by the authorities of the Central Bank of Nigeria (CBN), have not helped matters.
When the employees who have been fired or whose jobs are on the firing line thought they would find succour from the CBN, to their utmost shock and consternation, they found the CBN itself helpless to find a lasting solution to the looming problems the current purge in the banks may cause.
At the last count, more than 10,000 bank workers had so far been affected by the downsizing in the banks, and indications from that sector show that many more employees will yet lose their jobs. A rundown of the current pruning exercise shows that Intercontinental Bank Plc has sacked 1500 workers, apart from 26 top managers; Oceanic Bank Plc disengaged 1500; Wema and Spring banks retrenched 500 and 200 workers respectively, while the United Bank for Africa (UBA), is said to have embarked on a massive purge of its staff strength. Union Bank is said to its have put finishing touches to its planned sack of some of its workers and Finbank has also sent many packing.
At the moment, seven more banks including Afribank, Bank PHB and Spring Bank have already compiled fresh lists of over 6000 workers to be sent back into the over crowded labour market. This frightening development is unfolding at a time when Nigeria’s Labour Market is already bursting at its seams. This trend which a lot of watchers of the country’s financial sector said are fallout of the CBN directive on the banks to clean up their books in preparation for stiffer measures planned for the sector in this year.
Another measure which banks have proposed in order to meet up with the demands of the CBN is to shut down some of the banks’ branches. All these moves are aimed at restoring the prestige of the banking industry. But the crux of the matter borders on poor supervision of the industry by successive leaderships of the country’s apex bank. This resulted in the players not playing according to the rules. The consequences as it were, have fallen on innocent workers who played little or no roles in the balkanisation of the industry.
The Anguish, The Agony.
Within the last three months, the banking industry, which used to be the envy of most job seeking Nigerians, experienced an unprecedented onslaught of downsizing which has not only considerably pruned the workforce of the sector, but demystified the industry in the eyes of Nigerians who hitherto thought everything about a bank job.
The impact could be likened to a tsunami, sweeping across the banking industry! In the wake of the first wave of retrenchment, more than 6000 bank workers, cutting across several old and new generation banks lost their jobs. While the country’s over-bloated labour market is finding it difficult to absorb the sudden influx, fillers from the industry indicate that by the time the Tsunami would die down, more than 20,000 of the sector’s more than 100,000 workforce would have been forced back to the labour market.
The current rightsizing exercise which has generated pockets of protest and raging controversy over compensations is the result of the current Central Bank of Nigeria’s Mallam Sanusi Lamido Sanusi’s banking sector reforms, which have inflicted untold hardship on Nigerians, many of whom depend on their relatives who worked in a bank, but got laid off.
Life for many of those affected in the purge will never be the same again. The reform which appeared harmless but stern at the beginning, simply demanded strict conformity to banking regulations, transparent application of ‘best practices’ and ‘full disclosure’ principle. In the course of enforcing these policy guidelines for operation in the sector, it snowballed into the unearthing of multiple insider frauds, which resulted in the ignoble sack of eight banks’ managing directors and their executive directors.
The apex bank appointed new management teams to control the affairs of the affected banks. The sacked chief executive officers were accused of being the brains behind the improprieties in the sector, which included but were not limited to stealing of depositors’ and shareholders’ money The banks affected were Intercontinental Bank Plc, Oceanic Bank International Plc, Union Bank Plc, Afribank Plc and Finbank Plc, Spring Bank, BankPHB and Equitoral Trust Bank (ETB).
The newly appointed managements and other banks which passed the CBN fitness test decided to cut down operating costs in order to maintain stability in their various banks. One of the first measures they embarked upon was a mass retrenchment exercise. This did not go down well with organised labour, who immediately replied with an ultimatum for the banks to reverse their decision. The Nigerian Labour Congress (NLC) which spearheaded the protest against the sacking, said it was done without due process. One of the banks, for instance, was said to have sacked an employee because “he hardly left any money in his account soon after salaries had been paid!”
Some others were sacked because they could not comply with the order of the CBN-installed new management teams in the troubled banks, to pay back some running loans they facilitated for certain customers. Yet many others were sacked because they could not immediately clear their own personal indebtedness to the banks, as rashly ordered by the new management teams, keen on posturing as dutifully carrying out CBN’s order on sound risk management. Some it has been said also lost their jobs, because they’d had close relationship with the former management of the banks. Those who were lucky to have escaped the sack hammer have had their salaries and allowances slashed or reduced drastically.
The shock of the sudden loss of jobs in the financial system has caused a lot of havoc in the lives of those affected and their dependents For instance; one of Spring Bank’s female employees who were affected by the rationalisation exercise had a miscarriage the very next day after receiving her sack letter. This situation was made more pathetic by the fact that she had waited for years to conceive. Former employee of Intercontinental Bank Plc, Marina branch, described her sack as the end of the road for her and paid employment.
According to her, the recent retrenchment in the bank had enabled her to take a decision she had not been able to take since she got fed up with working for another person. She decided to establish a small scale business of her own. The painful thing according to some of the sacked workers, is that some of the banks that retrenched staff are yet to pay them their severance benefits, as promised them in their letters of disengagement.
This, they said, was injustice, pointing out that after all, they were not the ones who stole or mismanaged the money in the first place. Different strokes for different folks, the saying goes. Mr Ifeanyi Okolo’s wife’s was affected by the retrenchment, but he tells anyone who cares to listen that it helped him carry out a decision he had long reached, but which the wife vehemently opposed.
“The sack is a relief to my entire family. My wife was thoroughly stressed out daily as she strove to meet target to keep her lucrative bank job. I had always wanted her to quit the job and go into some other less stressful career, a wish she always resisted,” he said. He pointed out however, that the area he didn’t like was that the bank (one of the troubled ones) never took his wife’s past sterling performances into consideration when it came to the decision of who to sack.
Okolo lamented that before the crisis, his wife had an excellent record in the bank, as she constantly overshot her targets, but because of the current crisis in the sector, it became difficult for most marketers, including her, to meet their targets.”Consequently, they downgraded her performance and classified her as a laggard; that is what I do not like about it all.
They ought to have taken her past record into consideration, knowing fully well what the situation had become. Truth is, nobody wants to keep his money in the banks now; everybody wants to watch and see how this whole thing plays out first. But, otherwise, there is nothing to worry about,” he added. Although about 6,000 workers have already been thrown into the labour market for now, it is expected that between now and the second quarter of this year, about 10,000 workers of banks may have lost their jobs. This situation, apart from placing the remaining banks workers in a state of confusion, has created fear among them, as they do not know the next person who would go.
A member of staff of a new generation bank, whose head office is located at Victoria Island, told LEADERSHIP WEEKEND that workers are operating in fear. The employee pointed out that one could only claim to be a staff member of any bank when by the close of work every day, they still had their jobs, noting that every employee goes home with all his/her belongings every day, just in case. The employee said that although a cut in the salary was better than being thrown out of job, life will not be easy for them.
He further explained that majority of the workers of the troubled banks, both those who had lost their jobs and those who had that survived, have adjusted to suit their new situation and salary structure. Some, according to him, have transferred their children to cheaper schools, just to be able to keep them in school. Explaining the reasons behind the reduction in staff strength, managing director of Oceanic Bank, Mr. John Aboh, said that prior to the bank’s staff rationalisation exercise, the bank was expending over N4 billion monthly on salaries and wages for a workforce of over 20,000 people.
“We had to implement the painful process of staff rationalisation to streamline the workforce, in line with the current business realities, otherwise we would be deploying depositors’ funds to sustain the bloated workforce. The vision we have is to grow the business to ensure consistent value creation for our customers and shareholders.” He disclosed that the bank’s management had already implemented an across-the-board salary cut that would further streamline its cost profile and further enhance its drive for operational efficiency.
This strategy was adopted following a meeting in which the bank’s executive and senior management unanimously agreed to this unprecedented sacrifice, in order to hasten the recovery pace of the bank. The details of the salary cut include: 15 – 20 per cent for senior management and 22.5 – 35 per cent for executive directors and the MD/CEO. Aboh said the development was a clear demonstration of the commitment of the workforce to the robust recovery plan unveiled by management, adding that the management places high premium on operational efficiency as a vehicle for building the bank’s capacity for sustainable and consistent profitability.
“For us as employees, it is a necessary sacrifice we have made to ensure a better future for our bank and its numerous customers and shareholders. We have critically examined the cost of running the bank against our sustainable revenue base and we realised that the cost is over-bloated. The zeal to return the bank to winning ways is a shared vision by all the staff, and this has been the driving force for the management,” he said.
The anguish of most of the affected banks’ workers who have lost their jobs can only be imagined. In Abuja for instance, some of the sacked workers who before now were living large woke up to a reality that compels them to structurally adjust their belts. Due largely to the mouth-watering salaries they received and the accompanying allowances, they had developed a taste for the very best. And so instead of living in the suburbs as most workers in the federal capital territory including government workers are wont to do because of the considerably low rents of houses there, bankers were able to pay the exorbitant rents in the metropolis.
With what is going on now, these former bank employees are faced with not just how to renew their rents, but for some, how to even pay rent for a new house in the suburbs, even though rents are cheaper there. They have also been forced to begin to settle for alternative jobs, of course, not as attractive as a bank job. An employee with Finbank told LEADERSHIP weekend that the past few weeks had been depressing for everyone.
He said it was sad to watch the faces of his colleagues who came to work, tried to log in, but couldn’t indicating that they had been sacked. Many broke down in tears. Everyone, he said, was living in fear and uncertainty. He narrated how the allowances they usually received every January had been slashed so low that not only can he not renew the rent of where he currently resides, he cannot also with what they’ve been given, rent a new place. “And my landlord has given me till Sunday (tomorrow) to pack out,” he lamented.
“Because the allowances come in January, the rents of almost all of us are now due, and we don’t know what to do.”One of the affected persons who spoke with LEADERSHIP WEEKEND lamented that he was putting finishing touches to his marriage plans when his sack letter came. According to him, he was planning a grand occasion, but now, he has been forced to cut his coat according to his new size.
At the northern headquarters of one of the old generation banks, a regional manager who spoke on the condition of anonymity said that the current sack of workers would not bring about much change in the fortune of the banks. According to him, the problem with the banks stems from the directors and managers and not the junior staff, who he said are being made to pay for the mistakes of their bosses. The manager pointed out that the CBN was putting undue pressure on the banks and the sacking itself can be seen as a panic reaction to the demands of the CBN.
He noted that in the process of the ongoing retrenchment, the banking industry would lose a lot of well- experienced hands who have received various training in banking and who would have become the next generation of leaders in the sector. He called on government to prevail on the CBN to find a way of reabsorbing most of them, especially those with good qualifications and experience. An accountant of another bank who spoke on the issue recalled the days of Abacha when some banks were liquidated as a result of the sharp practices of their owners. He pointed out that Nigeria was always making the same mistakes, which he said is the cause of the instability in the country as a whole.
The drive for operational efficiency will also see the bank streamline its subsidiaries and branches to enhance its overall competitiveness and profitability, he said. It could be recalled that the federal government had recently condemned the consistent sacking of bank workers in the country, saying that it would not accept the over-saturation of the labour market which would be caused by the sacks. The minister of Labour and Productivity, Adetokunbo Kayode, said in Akure that the federal government would not condone an excuse for the exercise, the ongoing reforms by the Central Bank of Nigeria in the sector.
“The federal government will not tolerate mass retrenchment in the banking sector, because we cannot sacrifice majority of our people on the altar of the profitability of banks, especially when government had injected money to bail out the banks from their excesses of the past.”Kayode argued that the step being taken by the banks was uncalled for, as the government was trying to come up with a better package for the workers.”I have made up my mind that we will fight this battle to the finish.
There is no policy direction that banks should retrench, we won’t allow it,” he added. Here’s hoping, for the sake of those now suffering for what they largely had nothing to do with, that the Honourable Minister, federal government and labour unions, can make good their promise to see to it that the current wave of retrenchment is stopped, and that those already sacked are recalled. Also, that the devastating cuts in salaries and allowances be looked into. While a cut in bankers’ remuneration might be necessary in the salvaging of the banking sector, it should be done reasonably.
Chika Otuchikere and Amaka Ifeakandu-Leadership