UBA: Robbing Peter to pay Paul, sacks 2000 employ 4000

1201

…To spend N5b on staff review, entitlement

Contrary to some flowery reports across some media over the weekend, insiders have indicated that one of the sad development toward the close of last financial year was the massive downsize by a tier-one banking institution in the country.

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According to insiders, about 2,000 staff of the bank, with head office on inner Marina, Lagos Island lost their means of livelihood by the close of 2019.
The sacked workers were said to have been replaced with casual workers, usually refer to as contract staff in the industry parlance, in some instances.
One of those who lost his job in the shake-up in the top tier bank said the management of the financial institutions chose to relieve them of their duties to cut costs and reduce the burden of payments of allowances and upfront cash to the workers, one of the perks bankers used to enjoy in the past.
In an interview with Newdawnngr another staff who has been with the bank for over nine years in one of its branches in Agege area of the mainland,but choose to remain anonymous said no reasons was given by the management.
She was given her letter of disengagement at close of work on Friday 3rd of January.
According to another laid off staff, the majority of those affected are low-level officers of the bank and some within the middle-level officer’s cadre.
A report by Channels Television on Monday showed that the United Bank of Africa (UBA) conducted a review of its staff structure, which involved 5,000 of its workforce, out of which 1,000 were laid off.
According to the Business Morning Anchor, Boason Omofaye, the staff review is going to cost the bank about N5 billion.
The report also indicated that the lender has reduced its promotional cadre to 12 levels from 16 in the course of the exercise.
Analysts said many banks are restructuring their workforce to accommodate more contract staff in their quest to reduce overhead costs and do away with huge allowances due to financial industry workers and gratuities after laid off or retirements.
The ongoing restructuring in the industry is attributed to the anticipated impact of the recent reduction in the tariff charges on customer transactions.
The Central Bank of Nigeria (CBN) had slashed various fee charge by banks on transactions carried out on their platform by customers in a bid to expand financial inclusion in the country, this measure insiders said would impact on the bottom line of many lenders going forward.
Aside from the reduction in tariff, lenders are also confronted with a possible decline in interest-earning in the new financial year due to falling returns on government debt instruments.
interest income has become lenders’ cash cow in the recent past as the regulatory bank strives to lure investors to government debt instruments to fight surging liquidity and equally attract needed foreign exchange into the country.
However, as the CBN review its cost of liquidity management, the regulator had last year barred private investors and some local institutional investors from buying its Open Market Operations (OMO) bills, which has in the past attracted high returns for investors.
The regulator also increased the Loan To Deposit Ratio (LDR) of banks to 65 percent and gave December deadline for compliance, these developments have put some lenders under pressure to reduce operational cost and stay afloat.
The resultant impact of the regulatory directives was the mass staff laid off that swept across some top lenders, including the UBA in 2019.
Global Financial Digest reporter was unable to reach a spokesman for the lender as at the time of the report.

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