Diamond Bank Sacks 200 Workers across Nigeria

The slowdown in the economy has fuelled a high
non-performing loan rate in the banking system, causing banks to record
sharp decline in their profits for the 2015 financial year and the first
quarter of 2016.

Diamond Bank was said to have fired the workers on Friday.

Confirming
the development in a statement on Tuesday, the lender said the sacking
of the 200 workers was in line with its strategic plan to drive
shareholders’ value.

The statement read, “Diamond Bank recently
rightsized its workforce. The rightsizing was a core strategic exercise
in line with the bank’s growth objective and the will to continue the
drive to optimise cost and enhance value for the shareholders at the end
of the business year.

“In the bank’s last appraisal, only 200
staff whose performance scorecards were adjudged to be lower than the
minimum required to drive its strategic growth plan for the business
year were relieved, with the opportunity to seek employment in other
organisations where their respective skills set and individual
performances could be enhanced and optimised.

“The yearly
appraisal is a general industry standard and enables banks to prune
their workforce and prudently allocate resources for optimum result.
Diamond Bank is not an exception in the industry and therefore, had
carried out its annual appraisal and found the performance of members of
staff that were relieved to be below the required minimum performance
level that would sustain them in the system. With its trim-and-fit
workforce, the bank is sure to meet its target for the current business
year.”

However, unconfirmed reports had it that the number of workers who were asked to go was in the region of 400.

The
reports stated that the lender was aiming to reduce its N800m monthly
wage bill significantly and was also considering pruning workers in the
managerial cadre by 80 per cent, a claimed that Diamond Bank denied.

FBN
Holdings, the parent company of First Bank of Nigeria Limited, had a
few weeks ago said it would reduce costs by gradually cutting down on
its workers by 1,000.

This came after the group posted over 80 per cent decline in its profit for the 2015 financial year.

Bad
loans in the banking industry rose sharply by 78.8 per cent to
N649.63bn in 2015, indicating severe deterioration in the quality of the
loan portfolio of the 22 banks, a Central Bank of Nigeria staff report
presented to the Monetary Policy Committee revealed.

The report
also showed a general increase in bad/non-performing loans among the 22
Deposit Money Banks in the country. This was despite the 30 per cent
decline in new loans granted by banks in 2015 to N5.78tn.

According
to the report, 18 out the 22 banks recorded increase in bad loans.
Furthermore, the number of banks that exceeded the regulatory limit of
five per cent for the ratio of bad loans to total loans rose from three
in 2014 to eight in 2015, with three banks exceeding 10 per cent.