First bank of Nigeria
Plc has concluded plans to close several branches nationwide this is as a
number of
Deposit Money Banks in the Country that will close many of its
branches in what they described as unprofitable branches investigation by our
correspondent has shown.
In a letter of
approval exclusively obtained by AljazirahNigeria from the central bank of
Nigeria conveying the approval of the apex bank signed by Z. Markus for
director of banking supervision dated Nov. 7th, 2019.
According to the
document, first bank will shut down banking operations in 23 branches spread across
23 states of the federation.
AljazirahNigeria also
gathered that the banks would lay off hundreds of workers between now and
December. The revelation came barely a few months after 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 financial
institutions were spending more on salaries and overheads than the income from
the branches. Some of the branches for closure are as follows
Katcha Niger State,
Iyamoye Kogi State, Oguma Kogi State, Jakusko Yobe State, Okemesi-Ekiti Ekiti
State, Damasak Borno State, Garkida Adamawa State, Gulak Adamawa State, Damboa
Borno State, Oro Kwara State, Efa Akwa-Ibom State, Tinapa Cross River State,
Etinan Akwa Ibom State, Utu Etim Ekpo Akwa Ibom State, Sabongid a-Ora Edo
State, Ikirun Osun State, Odi Bayelsa State, Idoani Ondo State, Mopa Kogi
State, Aiyetoro-Gbede Kogi State, Share Kwara State, New Langtang Plateau
State, Brass Rivers State.
The bank was, However,
required to deploy alternative banking arrangement to ameliorate the negative
impact the closure would cause to the residents of the areas where the branches
are located.
Some top bank
executives, who confirmed the development to our correspondent under the
condition of anonymity, 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.”
Commenting on the
development, some financial experts who spoke to our correspondent, described
branch closure as an ongoing action in the banking sector, especially in times
of economic downturn.
They, however, 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.
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.
Banks in the country
had been posting sharp increases in profits before tax and profits after tax
since 2011 after the establishment of the Asset Management of Corporation of
Nigeria in 2010 following the banking sector crisis in 2009.
However, a consistent
drop in the global prices of crude oil, Nigeria’s main foreign exchange earner,
since June 2014, caused banks’ profits to start declining.
An economic analyst
attributes the declining profit in the financial services sector was a reflection
of the challenges facing the Nigerian economy.
As at the time of
filling in this report it is still not clear when the closure of the branches
will take effect.
Aljazirah news
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