Banks Set To Shut Down Branches, Sack Workers As Recession Bites Harder

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As the economic recession continues to linger, several Deposit Money Banks in Nigeria will close many of what they described as unprofitable bank branches and consequently, lay off hundreds of workers between now and December, Punch reports.

According to the information gathered, a number of bank branches could no longer meet up with expectations as cost analysis had revealed that the financial institutions were spending more on salaries and overheads than the income from the branches due to the economic meltdown in the country.

Confirming the development, some top bank executives who spoke to Punch correspondents under the condition of anonymity on September 19, disclosed that some lenders might be forced to sack more workers before the end of 2016.

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Bank Branches To Be Shut Down As Recession Bites Harder

An executive director in one of the banks that sacked some of its workers recently 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.”

Read More: Nigeria Falling Into Recession Does Not Scare Me – Dangote

Speaking on the issue, Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, who is also a former banker, said closing down of bank branches is an ongoing action in the banking sector, particularly in times of economic crisis. He nevertheless, pointed out that banks were required to notify the Central Bank of Nigeria before closing any branch.

Chukwu explained:

“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.”