Troubled Banks: CBN Orders 30% Salary Cut

WORKERS of the eight banks that were bailed out by the Central Bank of Nigeria (CBN) may soon be in for more trouble as the apex bank has directed that their salaries be cut by at least 30 per cent. BusinessWorld Intelligence can reveal that the banking supervision department of the apex bank has also ordered that the banks should submit action plans for the reduction of their workforce to a sustainable level.
In a memo to the banks, the CBN ordered they should “immediately reduce executive and other staff emoluments by at least 30 per cent and submit an action plan for branch and staff rationalization in order to utilize some hidden economies of scale in the bank’s operations”. It also asked the banks to submit their plan of action for enhanced revenue generation and cost reduction for the next six months.
The salary cut may take effect with the November salaries of the workers since the banks were asked to take the necessary action and revert to the apex bank by November 6, 2009. Bank officials are not volunteering statements on this development. They may indeed not be hidding indication that such actions may constitute some of the panic measures being embarked upon in an attempt to strengthen their banks. Officials of some of the banks involved have explained that they are aware of the directive, stating that they have to brace up for the challenge as such actions have become inevitable based on the developments in their banks. Staff of one of the banks also indicated that some of the banks have rather suggested salary realignment based on the very low salary scale the bank had been operating before the burst.
Our sources revealed that banks like Intercontinental, Oceanic and Finbank which reportedly pay competitive salaries in the industry may bear the brunt of the order and may be forced to cut far more than the 30 per cent. Union Bank is believed to have been working on realignment of salaries as it has not been able to address the payment disparity that has been existing in the organisation since the first phase of the consolidation exercise. There are indications that Afribank which increased workers salaries by 100 per cent few months ago may shed the addition the workers gained from the last dispensation.
This development may further aggravate the liquidity situation in the economy as bank workers are considered second in earnings after oil and gas employees, followed by telecoms.

http://businessworldng.com/web/articles/1029/1/Troubled-Banks-CBN-Orders-30-Salary-Cut/Page1.html