Nigerian Bank Nigeria Access Bank Plc – Central Bank Disowns Mass Sack

Source 234next.com: Oluwaseyi Bangudu, 6 January 2010

The Central Bank of Nigeria (CBN) has denied that it has anything to do with the ongoing mass sacks by banks, as it urges them to honour agreements with their workers.

Alluding to “several untrue reports in the media,” the CBN noted that the banks must have sacked their workers based on business imperatives. “We wish to reiterate categorically that the Central Bank of Nigeria has never directed commercial banks to sack staff or rationalise branches as reported. Banks are private enterprises and the decision to engage or disengage staff is best left to the management and boards of the institution. These decisions are taken on the basis of business imperatives,” the industry regulator said in a statement on Tuesday.

It cautioned all banks “to follow due process in honouring all terms of appointment of their employees and any collective agreements signed with Workers’ Unions. ” It however added that it is not “appropriate to encourage loss-making banks to further erode depositors’ funds and capital through inefficiencies in cost management.” Since the clampdown on banks, thousands of workers have lost their jobs in the once-juicy and highly-sought after industry.

Intercontinental Bank Plc, for instance, officially admitted to sacking about 1339 workers, though it promised to recall some of the workers when its finances improve. Mahmoud Lai Alabi, its managing director, said, “As a matter of fact, we have advised all the affected staff to leave their forwarding addresses with the human resources department for possible recall as the need arises. I must also add that both management and staff of Intercontinental Bank have made sacrifices on all generous and outrageous bonuses, all of which has since been suspended.”

Also, in a statement issued in Lagos on Tuesday, Mr. Alabi absolved the CBN of any guilt in the recent sacks, saying that Intercontinental Bank’s action was strictly the management’s decision and was not a response to any directive from the Central Bank as is being speculated.

According to Mr. Alabi, none of the core staff of the bank was disengaged, adding that going forward, some of the non-core staff could be repositioned and properly aligned into the bank’s outsourcing workforce without any reduction in their benefits. “The exercise, which is part of the strategic plans to reposition the bank to profitability level, affected senior manager to executive trainee grades. This exercise was carried out with due consideration of a number of assessment criteria,” Mr. Alabi he said.

Almost all the banks gave similar reasons for the massive layoffs; some, including Wema Bank, named “internal restructuring exercises” and others, like Wema Bank, said it is part of their “strategic plans to reposition the banks to profitability”. The banks underlined a “commitment to pursuing bold and necessary changes that will fully restore value and confidence to all our stakeholders.”

Other that have followed this path are First Bank, Stanbic IBTC, Diamond Bank, Access Bank, Oceanic Bank and the United Bank for Africa.

While a few banks like Intercontinental Bank, Skye Bank and Wema Bank have issued official statements on the development, others simply refused to speak on it, preferring to disengage their workers quietly to shield themselves from public criticism.

Worried by the future of the industry on account of the retrenchments, Sunday Salako, acting president of the Association of Senior Staff of Banks, Insurance and Financial in Nigeria (ASSBIFI), in a telephone interview with NEXT, expressed displeasure over the development.

“We have written a caution note to the Central Bank Governor that he should call his people to order, otherwise, the calamity that would befall that sector; he would not be able to handle it. He is only toying with a major industrial crisis, which is what we are saying. We have also written to the minister of labour on the issue, to intervene. This caution is necessary because when we start now, the government would now be calling us for a truce and all the rest,” he said.

The recent global recession as well as CBN’s sweeping reforms in the banking sector are thought to be responsible for the banks’ actions as they cut costs in a bid to remain in business.

Nigerian Bank Nigeria Access Bank Plc, Diamond Bank Plc, First Bank of Nigeria Plc, Intercontinental Bank Plc, Oceanic Bank International Plc, Skye Bank Plc, Stanbic IBTC, United Bank For Africa, Wema Bank