Banks To Shut Some Branches As The Recession Bites Hard

A number of Banks in the country will close some of what they described as unprofitable branches as the economic recession continues to bite harder, leading to less legitimate money.

Most of the banks are already in the process of sacking workers, between now and December.

The Punch findings indicates that the revelation came barely 24 hours after Unity Bank Plc laid off about 300 workers, more than the 220 that was mentioned last week.

Diamond Bank Plc, Ecobank and Skye Bank Plc had earlier in the year sacked over 3,000 members of their workforce.

It was learnt that following the economic downturn in the country, a number of bank branches could no longer justify their existence as cost analysis had shown that the Banks were spending more on salaries and overheads than the income from the branches.

Some top bank executives, who confirmed the development to The Punch on Monday, said some lenders might be forced to relieve more workers of their duties before the end of this year.

An executive director in one of the banks that recently asked some of its workers to go said, “We have laid off some of our staff members but that it still not enough. Many branches are just existing for the sake of being there. They are not generating enough income. What they are bringing in is far less than what the bank is incurring as costs on them.

“We may have to close such branches before the year ends. I know a number of other banks that are planning something similar.”

Reacting to 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 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.

The banking sector has been facing a number of challenges following the downturn in economic activities.

The slowdown in the economy, which has led to a high rate of non-performing loans in the banking system, made four lenders to lose at least N17bn in profits in the first quarter of this year.

In terms of their profit after tax, the four banks recorded a decline of N14bn.

However, consistent drop in the global prices of crude oil, Nigeria’s main foreign exchange earner, since June 2014, caused banks’ profits to start declining.

Patience Jonathan reacts to revelations on the Millions Dollars

Former first lady Patience Jonathan has admitted she is the owner and signatory to the five accounts in which the Economic and Financial Crimes (EFCC) found over $22.3million.

She said she has never received any money from any unknown sources paid into the five accounts.

But who or what are the "known sources" of the Millions of Dollars?

She was silent on the sources of the cash wired into the accounts. Mrs. Jonathan, however, explained that the accounts were opened to facilitate her travel overseas, particularly for medical treatment, sundry purchase for herself and her late mother Mrs. Charity Oba (Mama Sisi).

She indicted Wampemo-Owei Dudafa, special adviser on Domestic Affairs to ex-President Goodluck Jonathan, and Skye Bank officials for registering phony companies for four of the five accounts.