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first-bank
MAY 11, 2015
FIRST BANK MAY SACK 2,740 OVER BRANCH DOWNSIZING
Reports N64bn Loss in 2014
First Bank Holdings Plc may sack 2, 740 staff over the planed downsizing of unprofitable branches nationwide. The bank also reported loss of N64 billion in the 2014 financial year.

Mr. Bisi Onasanya, Group Managing Director/CEO, First Bank, said at the bank’s Facts-Behind-The-Figures presentation at the Nigerian Stock Exchange (NSE) that the bank will close unviable branches across the country to reduce cost. He assured however that no staff of the bank will lose his or her job in the exercise.

But a senior source in the bank told Business Journal that First Bank will shut down about 56 non-profit making branches nationwide and off-load an estimated 2,740 staff as part of the bank’s cost-cutting strategies in the face of difficult operating environment caused in part by falling oil prices and currency devaluations.

Bello Maccido, Group Chief Executive Officer of FBN Holdings Plc, said the company lost N64 billion to the increase by the Central Bank of Nigeria(CBN) in Cash Reserve Requirement (CRR) for both public and private sector to 75% and 20% respectively.

He said that monetary policy tightening through foreign exchange sales restrictions and closure of Retail Dutch Auction Sales (RDAS) window affected the company’s revenue generation capacity. The oil price decline also impacted the company’s earnings, according to Maccido, due to its exposure in the oil and gas sector.

FBN Holdings said it experienced “significant revenue loss due to CBN policy changes in tariffs, charges, CRR,” among other policies while “oil price decline was a major impediment and it really impacted on our business and in addressing this, we have put in place a rigorous stress test on credit facility structures for upstream customers to protect against oil price shock,” Maccido said.

Despite the challenges, FBN Holdings ended 2014 with gross earnings of N480.6 billion against N396.2 billion recorded in the comparative period of 2013. Profit Before Tax (PBT) grew marginally to N92.9 billion from N91.3 billion in 2013, while Profit After Tax (PAT) also moved up to N82.8 billion compared to N70.6 billion in 2013.

“In spite of the challenges in the industry, we still have the greatest number of branches. We have over 700 branches in the country. There would be rationalisation of non-viable branches. It is not also because we are essentially driven by profit. However, it is becoming critical that going forward we can provide banking services without gigantic structures. A lot of our peers have gone down to close some of their non-profitable branches. Technology will be used and we intend to migrate customers in the closed branches to Internet banking. What we are doing is to bring down our cost,” Onasanya stated.

He continued: “We are considering processes across the Group to reduce transaction costs and processing cycles. Realigning and rationalising the workforce in order to enhance overall manpower efficiency and productivity is currently the target of the Group.”

Responding to Business Journal enquiry on the issue, Mrs. Folake Ani-Mumuney, Group Head, Marketing and Corporate Communication, First Bank, insisted that no staff would be rationalised over the planned closure of non-viable branches of the bank. She described the sack information as erroneous.

Looking ahead, Maccido said:“We are cautiously optimistic about the rest of the year, as the country and economy benefits from improving confidence, and remain focused on managing effectively the macroeconomic challenges.

Source: http://www.businessjournalng.com/first-bank-may-sack-2740-over-branch-downsizing/