Ecobank Nigeria sacks 400

A dark cloud hovered once more, around the nation’s banking industry, as Ecobank Nigeria Plc announced the sack “about 400” workers, without offering any explanations.

The sack is coming at a time when many thought the worst times are over for the bank, a member of the Ecobank Group headquartered in Lome, capital of neighhouring Togo.

A breakdown of the category of those affected in the latest exercise was not given, but a statement by Ola Akinnola, Head, Brand and Communications, Ecobank Nigeria, on Wednesday, explained that the disengagement “is part of the Ecobank Group strategy designed to consolidate and optimize its operations.”

The statement quoted Jubril Aku, Ecobank Nigeria’s managing director as predicating the shake-up, “on the bank’s strategy to drive performance and deliver optimum value to all of its stakeholders with a highly efficient structure.”

Aku however assured customers that the sack will not hinder service delivery, while pledging that Ecobank will live up to its vision to build a world-class pan-African bank that will contribute to the economic development and financial integration in Africa.

Since the outcome of the stress test conducted on the nation’s banks by examiners of the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation last year, following which several banks were forced to make provisions estimated at about N1.76 trillion at the last count, several bank workers have lost their jobs.

Justifications for these have often been the need to cut overhead and other costs to enable them swim out of troubled waters as quickly as possible.

Those who survive the purge have also had to contend with a slash in salaries and other allowance that were not cancelled outright.

The gale of sack were initially linked to a directive purportedly from the CBN urging banks to embark on staff reduction and reduce branch network, as part of measures to cut operating cost.

But in a statement some months ago, the CBN said

it “has never directed commercial banks to sack staff or rationalise branches as reported.”

The statement argued that banks remain private enterprises, and that the decision to engage or disengage staff is best left to the management and boards of each institution.

These decisions are taken on the basis of business imperatives, the apex bank said, adding that its expectations are that all banks “follow due process in honouring all terms of appointment of their employees and any collective agreements signed with Workers’ Unions.”

The CBN, however, noted that it does not consider it appropriate to encourage loss-making banks to further erode depositors’ funds and capital through inefficiencies in cost management.

Although, Ecobank Nigeria has since announced a return to profit in its quarterly results for 2010, the audited financials to December 2009 indicated a thinning income from fees and commissions.

This resulted in only 8.56 per cent growth in earnings, even as operating expenses continued to rise, along with the N16 billion provisions for bad loans, leading to 561.92 per cent rise in loss before tax to N5.944 billion from just N894 million at the end of 2008.

The loss was however curtailed by a bigger tax rebate of N1.356 billion, as against the previous N893 million, bringing net loss at the end of 2009 to N4.588 billion, which a significant growth compared with the humble N5.0 million loss attributable to shareholders sustained last year.

Aku, while blaming the loss on the absence fees and commissions, which are the traditional source of revenue for financial intermediaries like banks, also listed the huge provisions as part of the problem.

Independent

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One Comment

1. 

   Abbasusman2000

   September 6, 2011 at 10:46 am

   Please Ecobank we are not intrested in reduction of staff while we are in Ghana and our money is stock in ATM mechines no one is willing to help us out of it we are going to media soon ALL STUDENT IN GHANE WILL STOP USING ECOBANK.