New Telegraph

COVID-19: Banks issue new conditions of service to staff

…step up cost cutting measures

 

In order to keep maintaining resilience in the face of the lingering COVID-19 crisis, deposit money banks (DMBs) in the country have started issu- ing new conditions of service to their staff as part of fresh measures to cut costs,

 

New Telegraph has learnt. Industry sources told our correspondent, at the weekend, that bank staff, who have been issued letters changing the terms and conditions of their employment, were given the option of either consenting to the new conditions of servicee, which stipulate that they won’t receive benefits, such as transportation allowance, or submitting their resignation letters.

 

An employee of a Tier 2 lender, who spoke on condition of anonymity, said that the new conditions of service appeared to be mainly targeted at staff, who have been working from home since the industry started implementing COVID-19 restrictions.

 

According to the bank      staff, although agreeing to the new conditions of service meant they have, in effect, accepted a reduction in their salaries, most of her colleagues, who got the new terms of employment, assented to them because of the unemployment crisis in the country.

She said: “While nobody wants to be told that his or her salary has been reduced, everybody knows that the country is facing a massive unemployment problem. Even before COVID- 19, things were already bad in the industry. The pandemic has worsened the situation.

 

“Some of our colleagues have been at home since April, last year, because their branches were among those shut by the bank when the government imposed pandemic restrictions. So, you could say that the new conditions did not come as a surprise to many of us.” New Telegraph learnt that apart from Tier 2 lenders, new entrants to the industry are also among the DMBs that have issued the new conditions of service to their employees.

 

In the wake of the spread of the pandemic to Nigeria in February last year, the banks, in line with COVID- 19 protocols, announced by the government, introduced measures to avoid crowds and ensure social distancing at their branches and offices.

 

As part of such measures, most banks temporarily shut some of their branches, as well as either redeployed staff or directed them to be working from home.

 

However, most of the shut branches have still not been reopened, leading to the DMBs disengaging the contract staff-security personnel, cleaners and other administrative staff who had been made redundant.

 

Analysts note that following speculation that many banks were planning to embark on mass lay off of staff following the COVID-19 induced lockdown of the economy in April last year, the Central Bank of Nigeria (CBN) held a meeting with bank CEOs during which an agreement was reached that lenders would not sack during the pandemic.

 

Indeed, New Telegraph recently reported that despite the agreement with the apex bank, data released by the National Bureau of Statistics (NBS) shows that DMBs sacked 8,584 employees between Q4’19 and Q4’20.

 

A top bank official, who did not want to be named, said that even before the onset of the pandemic, most lenders were already struggling to cope with the harsh business environment and that the pandemic had made things even more difficult.

 

The official said: “Banks are really struggling to remain resilient given the harsh business environment.

 

When people hear that banks are declaring impressive profit, they don’t appreciate the challenges that the industry is facing. “Inflation remains in high double digits and banks have to maintain at least two functional generators in each of their branches.

 

When you add the cost of providing security, investing in IT and so on, you will understand why banks always have to be looking for ways to cut costs.”

 

Efforts by New Telegraph to speak with the President, National Union of Banks, Insurance and Financial Institution Employees (NUBIFIE), Anthony Abakpa, were not successful.

 

In an earlier chat with New Telegraph on the issue, President of the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), Comrade Oyinkan Olasanoye, had said that members of her association had not reported receiving the new conditions of service from their employers. She said:

 

“No member of ASSBIFI has reportedofficially or unofficially- receiving new conditions of service. You know we have other unions in the industry. However, if I know any bank that is issuing new conditions of service, I will not hesitate to take the issue up with them.”

 

In a report release last December titled, “Nigeria’s banking sector: Thriving in the face of crisis,” global consulting firm, McKinsey & Company, stated:

 

“The unprecedented scale of the COVID-19 crisis has forced banks—and indeed all members of society—to re-examine and reimagine the way they do things.

 

“The McKinsey Financial Insight Pulse survey conducted in October 2020 found that most consumers expect to increase their use of digital and mobile banking services even after the crisis, with 53 per cent of consumers wanting their banks to make it easy to get a line of credit and 36 perr cent desiring improved bank websites to facilitate online transactions.

 

“In Nigeria, we’ve also seen a surge in agent-banking transactions during the crisis, opening up new possibilities for delivering services to more people at lower costs. However, these shifts may reverse unless steps are taken to hardwire new behaviors and attitudes.

 

“Now is an opportune moment for banks to revisit and interrogate matters of efficiency and productivity in a disciplined manner.

 

Actions taken out of necessity during the lockdown such as online training, virtual performance management sessions, remote working for certain jobs, and adjusted operating hours for branches could be refined for implementation on a permanent basis.

 

“Our analysis shows there is a 25 per cent to 40 per cent cost-reduction opportunity for Nigerian banks—primarily to be found in revisiting the branch network and coverage model, increasing efficiency of spend, and increasing productivity through end-to-end digitisation.”

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