Apparently, the economic recession is not limited to individuals and some businesses as a number of deposit money banks in Nigeria will close branches which they have tagged as “unprofitable.”
Reports from Punch revealed that as the economic recession thickens most banks would lay off workers between now and December. This was revealed few hours after Unity Bank Plc laid off approximately 300 members of staff. Unity Bank Plc seems not to be the only bank laying off workers as earlier in the year, Diamond Bank Plc, Ecobank and Skye Bank Plc had laid off more than 3,000 workers.
Nigerian banks seems to be affected more in the harsh reality of the economic recession as Punch reports that top bank executives have confirmed that more workers might be laid off before the end of 2016. This is coming in the wake of the high over head cost of running branches viz a viz the low income being realised from these branches.
Commenting on the development, an ex-banker and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, described branch closure as an ongoing action in the banking sector, especially in times of economic downturn.
He, however, noted that banks were required to notify the Central Bank of Nigeria before closing any branch.
“It is an ongoing administrative thing in the banking industry. Banks will want to rationalise branches, especially in a difficult economy. Banks are planning to cut costs. Branch rationalisation is normal but the CBN has to be notified,” Chukwu explained according to reports from Punch.
Due the economic recession, some Nigerian banks specifically Ecobank, Transnational Incorporated, Guaranty Trust Bank Plc, Unity Bank and Diamond Bank Plc recorded decline in their profits for the three months ended March 31, 2016.
Let’s all hope that things take a turn for better, else no one knows how bad the recession will degenerate.