Job losses: Banks advised to adopt credit analysis

No fewer than 3,000 employees of merged banks have been sent back into the labour market in the last one month.

In spite of that, there are strong indications in the sector that more banks plan to lay off some of their workers under the guise of saving overhead and operations costs.

In January, at least 1,500 workers of former Intercontinental Bank were fired by the management of Access Bank.

Access Bank will succeed the rescued bank from March when the merger is completed.

Ecobank Nigeria Plc also sacked over 1,000 members of staff of former Oceanic Bank Plc for similar reasons.

Ecobank took over Oceanic Bank in a merger. 

One of the nationalised banks, Enterprise Bank (former Spring Bank) also eased off 140 members of staff, who it said fell short of the employer’s target.

According to information we hear, Skye Bank, Afribank, Union Bank Plc were also planning to trim their workforce, a move that even the Central Bank of Nigeria may not stop.

Since the resurgence of the wave of sacking in the sector early this year, industry watchers have been appraising its effects.

Some cautioned the banks to tread carefully in their bid to save operations and overhead costs so as not to further saturate the unemployed market.  

But others argued that corporate downsizing remained the biggest fallout of the period and a legitimate option for business growth strategies.

The Registrar of Institute of Credit Administration, Dr. Chris Onalo, said the problem should be traced to the roots.

He said there was a dire need for the management of banks to be more transparent and less involved in influencing credit appraisal processes.

He said they should rather exercise absolute caution in approving the loan request, which in turn, may qualify their accounts for future debt purchasing or factoring by asset/receivable management organisations.

While he said it was unfortunate that hapless bank workers were the worse for the fallout of poor credit administration by bank chiefs, he made a case for credit analysis.

Onalo said, “A credit analysis is a process that bankers use to determine whether a borrowing applicant should be permitted to borrow money, either in the form of a loan or the generation of debt.”