Disengaged staff battle banks over lean severance packages

Unless concerted efforts are made by the regulatory authorities and industry operators towards attracting professionals back to the beleaguered banking sector, the desire to reposition the banks for a pivotal role of intermediation, to oil critical sectors of the economy, for growth, might prove elusive, BusinessDay investigations have revealed.

Specifically, some Nigerians, including those in Diaspora, who were hired for special departments such as wealth management, enterprise risk management, among others, have been frustrated out in a manner that has strained relationship with their former employers.

When the fortunes of the banks began to nosedive towards the end of 2008, following the global financial crisis, their appointments were reviewed and some of their benefits withdrawn. The development resulted in many of them abandoning their plum jobs, with some of them still expecting some payments from their former employers.

To make matters worse, BusinessDay investigations further revealed that the severance packages of these Nigerian experts were eroded by fringe benefits such as loans and upfront payments which were freely advanced to them. These have now been deducted at source, leaving some of them with zero terminal benefits, while others are even considered as debtors by some of the banks. This development is causing what appears to be an upheaval within the once revered banking profession, with some vowing not to return to the profession.

Already, the dearth of manpower, particularly in critical areas like risk management, corporate finance, and treasury, has started to take its toll on many of the banks, as evidenced in the current joint auditing between banks’ appointed auditors and CBN’s, the latter assisting the former in the process of repackaging distressed banks for mergers and acquisitions. Meanwhile, other banks which scaled the CBN stress test have had to shut down some of the departments established in the boom days, due to lack of qualified personnel to man them.

Martin Oluba, an analyst and president/chief executive officer, ValueFronteira Limited, regards the development as unfortunate, while attributing it to the poverty of the much needed corporate governance which, he further said, has impacted negatively on foreign direct investment into the country.

“The hiring of foreign and Nigerian expatriates by these banks, and the later termination of their appointments without due compensation in line with the agreement at commencement, is rather unfortunate. The poverty of Nigerian corporations in keeping promises is one factor that has affected not only the quantum of foreign direct investment, but also the growth of the knowledge economy that is inextricably tied to the expertise that exists in the developed world.

“There is no doubt that it will have a long term negative impact on the affected banks. But then, we still have the law courts which, I believe, will be able to provide some meaningful intervention,” Oluba said. According to one of the affected staff, the development has created a lot of apathy towards the profession. ‘’It took the intervention of ASBIFI (Association of Senior Staff of Banks, Insurance and other Financial Institutions) before we were paid our meager dues.”

In fact, an ex-banker who was invited from abroad to take up an appointment in one of the bailed out banks, told BusinessDay recently that unhealthy competition in the industry during the boom era contributed to what he regarded as unsustainable packages for some of the staff who were hired then, adding that the industry will suffer for a while before it can attract competent hands.

The strategy for most of the banks now must involve scaling up of operations through organic and inorganic growth, rolling out of terminal growth plans, as well as improved competitiveness, targeted at the top and bottom lines; all of which require competent personnel.

(Source: BusinessDay)