Current CBN interventions in banks: Is downsizing the answer?

The current happenings in the banking sector has left many surprised. Again! Initially, it was about capitalization and shareholders funds. Now its mismanagement of shareholders fund, High debt to Equity ratio. On a good note, it has been a very good and bold step on the path of the CBN governor to rescue these banks, shareholders funds and where possible remove the board responsible.

However, care must be taken as the management of many if not all the banks have taken laws into their hands. Downsizing in reality and threats of downsizing is everywhere. Staffs now work in fear, subjecting them to mental and emotional stress. Confirmed reports have it that some have already retrenched many of their workforces in response to the present condition of these banks. I am sure these management will always have explanation for these acts.(but it will be sad to discover if those without God fathers will be affected most).Which Transparent Criteria was used?

But we all know that Nigeria as at present isn’t a country so abundant in job opportunities. The largest employer of graduates from our tertiary institutions remains the banking sector, followed by Information and Communications technology. If these downsizings are allowed to occur unguarded and not regulated, the domino effect would not be in the best interest of our economy.

I am not sure how many families in Nigeria having graduates and do not have at least one working in a bank. If we get these facts, I am sure we will be shocked. I am sure someone reading this article is probably working in a bank, has a brother or sister working in a bank or knows someone working in the industry you wouldn’t like to hear he or she is now jobless .

Further more, these people (bankers) in many ways contribute to the economy of our great country Nigeria. Via Taxes, levies, fines, Bills, consumption of utility goods, the list is endless. From a larger perspective, the trader, transporters, shop owner, shopping mail, hospitals, schools etc: all these people benefit from the income coming from bankers (and other part of the nation’s workforce, however banking has been the largest).Hence, keeping many off the unemployment zone. Watching them sacked grossly by the Federal government and CBN will not be good for our citizens and economy as a whole. The lists of these effects are endless. Just imagine.

What the Government, CBN and Labour Unions should do

Instruct Banks to stop the threats and actual downsizing.Stop this emotional and psychological stress .
Review the previous downsizing. How fair was it, what criteria, how transparent?.
Mandate CBN to be involved in any downsizing plans.
Mandate banks who still choose to downsize to payoff the affected staff for rendering them redundant. I recommend 2 years salary.
Pay cuts are allowed but should be pegged by the CBN.Separate percentage for Senior managers and for junior officers.

After all, staff strength was not responsible for the present bad states of these banks. Mismanagement of shareholders funds and depositors’ funds were responsible. Why should innocent and hardworking workforce get punished for what they are not responsible for?

The government of Nigeria should come to the rescue of these hard working citizens of this great country in the banking sector. Some have had career changes just to be gainfully employed, reducing the unemployment rate in the country.

To the banks:
These are some obvious reasons for failure
a. Poor and ineffective risk management system
b. Lack of strategy(increasing deposit base is not a strategy neither becoming the No 1 bank in the country)
c. Top heavy syndrome( too much resources goes to Corporate HQ)
d. No bank has any competitive advantage (same product, same market,same funds cross carpeting)
e. None has any core competence
f. Breach of psychological contracts with employees producing lack of commitment
g. Many unrelated diversifications. Imagine a bank into insurance, homes and mortgages, asset management, custodian, microfinance, health management, pension fund management, capital markets, registrars, securities etc. One bank! These all drain the cash flow of the core function-BANKING.


What can be done?

I l will just give some insights into what Banks should rather focus on

CBN should employ external strategist to all the banks involved , but reporting to the CBN governor and not to the board of the bank(they are not serving the interest of the board but depositors)
Carry out strategic re engineering processes that will move these banks forward.
Downsizing is not the answer to reducing costs. Creativity and innovation is the key. To cut cost is to develop efficient systems that reduces money and time spent on processes and not reducing staffs


In developed countries, no management, no matter the economic conditions will embark on downsizing the way it’s been done in Nigeria at present. I didn’t say downsizing doesn’t occur; it does but not like this.

I am confident that downsizing would not solve the present problem with the banks. It would appear to have done it when fewer salaries are paid. But it’s still business as usual.

Downsizing is not the panacea for mismanagement. It’s simply a reaction from these bank management and not a well structured thought out strategic response.

I appeal to the President of Nigeria, the National assembly, the Labour force and well meaning Nigerians. Please halt this action of downsizing. Nigerians would be grateful if this can be done for them.

I am not making this plea because I work in any of these banks. I have worked in a bank before but I’ve resigned and no longer live or work in Nigeria. But I have got friends, relatives, breadwinners in this industry.
Can I pretend not to observe these? No.

God bless Nigeria

Cause and effects

Hello friends, its been a while doing a post on this site, well i have just been involved in some quite consuming project.Back to school.

Anyway, i decided to start with this piece, its been on my mind for some days now and I am confident should move you nearer your desired goal

Do have a great week ahead. Cause and Effect

All of life is Cause and Effect
What results do you desire today, this week, this month or year?
Do you feel it’s beyond your influence?
If yes, then you might be wrong
All of life is Cause and Effect

What are you consciously doing today to influence your tomorrow?
What cause are you employing? What effect to do desire.

Most of us live through life without taking serious thought to these questions daily and at least weekly.

But you might ask, how do I influence the cause, how do I alter my today?
In as much as there are many ways, one of them is simply—PRIORITIES

Many times today life will ask you what’s important to you. And each time you’ll answer not with words but actions. In each of these moments, life will be asking you about your priorities.

What are your true priorities? Take a look around and you'll clearly see.
The reality of your life is a result of the priorities you've chosen. Consider where those priorities have brought you. Selah (pause and think calmly)
Yes, of course there are many factors beyond your control. Even so, the way you respond to life's ups and downs is what determines where you go.
Your priorities are not necessarily what you say they are. Your priorities are best evidenced by the way you live, moment by moment, day by day.
If you're pleased with where those priorities have brought you, then you'll surely want to hold on to them. If you know that things could be better, a positive change in your priorities will reliably get you there.
Either way, your priorities are yours to choose at any moment by the actions you take. And the way you choose to live them can make all the difference in the world.