Job loss looms as banks move to cut cost

[TGD]

 SOME banks in the country have begun what is termed the process of re-grading, which may lead to loss of jobs in the top management cadre of such banks.

The Guardian learnt at the weekend that up to five banks in the country have embarked on the process last week. One of the banks hitherto with six executive directors is planning to prune them down to three. Those to be affected are executive directors in charge of South-South, Lagos and South-West, and South-East. Those to be retained are executive directors in charge of operations, domestic banking and wholesale banking.

According to a source, the fate of the three regional executive directors is not yet clear, but they may be reassigned. He said the new trend in the banking industry now is to do away with regional executive directors as banks have found out that their outputs in those positions hardly justify their rank.

The essence, he revealed, is that banks are now planning to cut costs, and one of the areas they are looking at is the top management cadre that is not pulling its weight, productivity wise, as opposed to laying off junior workers.

The banks being affected are those with 60 per cent workforce in the top management cadre and 40 per cent in the junior cadre, which is being be termed top-heavy.

The branches targeted for the exercise are those in Ajose Adeogun and Ahmadu Bello in Lagos, Abuja (Wuse) and Port Harcourt branches, The Guardian gathered.

The source said the thinking is that it is unproductive for an assistant general manager to be in charge of a branch, no matter the importance of the branch. To correct this, The Guardian was told that about 15 branches would be placed under the supervision of an assistant general manager "to make him really work for his fat pay. Any one of them who fails to meet up will be shown the way out."

It was learnt that this move by the banks is causing disquiet in the top echelon of the banks. A top official of one of the banks said: "No one knows what is going on. You know at this level, if anything goes wrong, getting another job is almost impossible unless one is exceptionally lucky."

The banks, The Guardian was told, have come to the realisation that with the various measures put in place by the Central Bank of Nigeria (CBN), the avenues for making cheap money are fast closing up.

Based on that, they are looking at various ways of cutting costs, and one of the ways is to do away with some fat cats in the banking system deemed unproductive.

The apex bank, it will be noted, has been toying with several ideas on how to help banks cut their costs. For instance, last year, the CBN governor, Sanusi Lamido Sanusi, in Abuja, assured that banks' overhead would crash by more than 30 per cent within the next three years as a result of various initiatives being spearheaded by the apex bank.

He made the statement during the fourth yearly banking and finance conference of the Chartered Institute of Bankers of Nigeria (CIBN) while speaking on the theme "Evolving Financial Landscape: Strategies for Economic Resilience."

Sanusi had explained that given the criticality of efficiency to cost of funds, the CBN had started a shared services project in collaboration with banks aimed at centralising back offices and industrialisation of common processes.

Sanusi added that the bank is also working towards establishing an Independent Power Project (IPP) for power supply to all banks operating in Lagos as a pilot cluster.



The Guardian