Following the recent announcement of the new minimum capital requirement by the Central Bank of Nigeria, the Association of Senior Staff of Banks, Insurance and Financial Institution has assured workers in the industry that their interest will be protected as the union has taken steps to ensure that anybody affected is well-compensated.
Olusoji Oluwole, President of ASSBIFI, said the issue of job loss might happen as a result of mergers and acquisitions, adding that this possible development could not be overruled in the process, the Association said.
Oluwole stated, “We are aware that there may be job loss and this is due to various factors.
“The first thing was that if banks are merging, there may be duplication of roles. The second issue will be that they may have an enlarged staff number that they may probably want to reduce. We recognise that fact.
“Now, the moment CBN announces capitalisation, we, as a union, immediately reached out to CBN, expressing our concern about job loss. And this is as a result of our experience in 2005.”
The ASBIFI president also said, “So, we wrote to the CBN and notified our labour centre. We stated that the issues of those staff need to be recognised and taken into consideration when decisions are being taken.
“And where for any reason, anybody is going to be affected, then they must be adequately compensated according to the Labour laws and that of the International Labour Organisation that speaks about disengagement.”
He further explained: “Merger and acquisition was a big deal in the 2005 exercise. Most of the banks then were just or slightly above N25 billion capital base.
“Moving from N2 billion to N25 billion was a big deal in 2005. But between 2005 and now, all the banks have raised their capital. I will doubt if there is still any bank today that is still operating on N25 billion capital.
“Efforts have been made by many banks to shore up their capital base. So fast forwarding, we have about 25 banks operating in Nigeria. We cannot discount the possibility of merger and acquisition.”
Oluwole said recapitalisation on its own is a very good development and it is long over due after the last exercise in 2005.
He said the exercise would make the Nigerian economy and banking industry stronger.
“It will make banks carry our bigger business transactions and it will positively affect the economy.
“On the exclusion of Retained Earnings by the Central Bank of Nigeria, we are waiting as things unfold. But, sincerely, I don’t see it as a big deal. The CBN circular gave various options to banks, which they didn’t have in 2005. There were no such opportunities in 2005.
“Going back memory lane, in 2005, lots of banks were just going into public for the first time. They all depended on private business. But now, CBN said you could go to the stock market, right issues and you also bring in foreign debt,” he said.
Oluwole also noted: “All these are open to banks. Don’t also forget that CBN gives two years’ grace. It gives them lots of opportunities, which I know most of them have started doing since last year.
“Another thing was that banks have the opportunity to either downgrade or upgrade their licences. Today, we have regional banks, national banks, and micro finance banks. And all of them have their rules and capital base. So, some banks that may not meet up may want to downgrade.”
