Bank Workers Jittery as Pressure on Deposit Mobilisation Heats Up

By Festus Akanbi (THISDAY)
Although the banking community including shareholders, bankers, customers and regulators are waiting with baited breath for the year 2012 financial performance of banks, there are indications that some of the banks have started to take some pre-emptive steps to stay in competition, as bookmakers predicted a tough operating year in 2013.
THISDAY checks revealed that apart from some banks, which have decided to reshuffle their staff in order to meet up with the new business directions, which the emerging realities in the industry have forced on them, a number of operators are said to have raised the bar for their marketers in terms of deposit mobilisation.
Meanwhile, the rising appetite by banks for deposits has attracted criticism from some industry watchers who feared the era of unrealistic target for bank staff may have surreptitiously crept back into the Nigerian banking industry.
Last month, no fewer than 100 members of staff of Access Bank Plc were said to have been relieved of their jobs.
Some of the affected staff alleged that they lost their jobs because they could not meet up with the management’s expectation in respect to deposit mobilisation.
It was gathered that some of the accounts of the affected staff were also frozen by the bank to ensure all outstanding facilities incurred by them were recovered. The most affected staff members were those in Abuja and a few others in Lagos.
Spokesperson for bank, Mr. Segun Fafore, who neither confirmed nor denied the report said the aggrieved ex-staff were being mischievous given the fact that the bank had not hesitated to promptly reward outstanding members of staff. He, however, denied the allegation that the accounts of any of the staff were frozen.
“They should be able to tell you that the bank has promoted some staff more than once within a year based on their excellent performance,” he said, explaining that rationalisation is a normal exercise in banks.
Sources said some other banks are already reviewing their activities and that some of their employees are likely to get additional tasks in order to bridge the gaps, which the paucity of revenue are bound to cause this year.
Central Bank of Nigeria spokesman, Mr. Ugo Okoroafor, said banks are being run as business concerns and they are free to use whatever legitimate means they can to stay in business.
According to him, shareholders would be waiting for the banks to declare profits and dividends at the end of the year, saying nobody can stop the banks from being run as a business.
When asked to confirm the position of the apex bank on unrealistic targets, listed as one of the problems that led to the banking industry crisis in 2008, Okoroafor promised to call back.
The renewed interest in retail business was said to have been caused by shortage of cheaper fund in the system unlike the situation in 2012.
A report by the Banker Magazine, which confirmed the development said for the time being, most lenders will continue to buy plenty of government bonds, which were still yielding as much as 11% in mid-February.
But to make the trade work as well as it did last year, they are trying to raise more and cheaper deposits with which to fund their purchases.
UBA’s chief executive Phillips Oduoza told the magazine that this is part of the reason there has been a “paradigm shift” in the purpose of his bank’s branch network.
“Before now, we’d been using branches to generate deposits and assets,” he says. “But now their focus is primarily on deposit mobilisation. Our people are measured along those lines.”
Nonetheless, analysts warn that this year conditions could get tougher. In 2012, most banks’ provisions for bad debts were low thanks to them having clean balance sheets in the wake of AMCON’s purchases.
Treasury bill yields were high, often more than 16%. As such, Nigerian lenders, almost without exception, piled in to the sovereign bond markets.
“Last year was fairly easy for the banks,” says Yvonne Ike, Renaissance Capital’s chief executive for West Africa. “They had a nice interest rate environment, with high government bond yields. They had to do very little to generate returns.”
According to the Banker Magazine, that benign environment is already changing. Bankers admit provisions for NPLs will probably rise back to normal levels in the next two years, while treasury rates have fallen heavily in the past few months. And an annual charge on banks to make them pay for the government’s intervention and reduce the burden on taxpayers – the so-called AMCON levy – will increase this year from 0.3% of their assets to 0.5%. As a result of such conditions, Ronak Gadhia, an analyst at securities firm Exotix, believes return on equity (ROE) for the five biggest lenders by assets – First Bank, Zenith, United Bank for Africa (UBA), Access Bank and Guaranty Trust Bank (GTB) – will fall from his forecast of 22.5% for 2012 to slightly under 20% this year.
All of these factors could force banks to become more innovative. “This year we’ll know the banks that have sustainable, good businesses,” says a partner with Chapel Denham, Mr. Bolaji Balogun. “Everyone is going to have to go out and actually lend (to the private sector). We’ll see if the lessons around credit have been learnt, which banks have strong customer bases and which banks know how to control costs.”

All bankers know that their jobs (like every other job) are not permanent, so I don't think bankers will be jittery because of unrealistic targets. Appraisals are not based on deposit mobilisation alone. There are lots of other parameters used to appraise bankers. Please give bankers a break on this forum!

234GT: All bankers know that their jobs (like every other job) are not permanent, so I don't think bankers will be jittery because of unrealistic targets. Appraisals are not based on deposit mobilisation alone. There are lots of other parameters used to appraise bankers. Please give bankers a break on this forum!

Cool down bro, this post is only a news item from THISDAY NEWSPAPER. It is not meant to ridicule bankers...I am a banker myself and you can check my previous posts-They are largely positive...there was even one that you commended (see below).

https://www.nairaland.com/1104418/bankers-exciting-times-ahead

By the way, I usually enjoy your comments. Are you still in Union Bank?

I am with Union Bank. I am enjoying the job, but I must confess that I almost turned down the job because of negative things I read about banking on this forum.
Enjoy ma brother!

234GT: I am with Union Bank. I am enjoying the job, but I must confess that I almost turned down the job because of negative things I read about banking on this forum.
Enjoy ma brother!

You are welcome. Greatest OOUITES!

Great o! The school is a total package. OOU for life!