A gale of sack is quietly sweeping through the banks in an exercise that has sent several hundreds of bank employees into the labour market. The current downsizing is said to be a response to the tight fiscal policy of the CBN as well as declining public sector deposits in the banks.
Diamond Bank Plc which appears to be the frontrunner in the frantic response to the financial noose has sacked about 1,000, an action it undertook to remain afloat. The bank has made no official statement on the silent job cut but inside sources told our correspondent that the bank is under the strain of toxic loans and sundry transactions that lacked due diligence and has put the bank in a bind.
But it is not only Diamond Bank that has been caught in this web of declining profitability. Ecobank Plc is another bank that has been quietly shedding weight to meet its obligations to its clients. A competent source at the bank told our correspondent that has not been well with the bank which has continued to buckle after its alliance with the old Oceanic Bank.
A staff of Diamond Bank said huge loans some of which have become toxic and other self-inflicted unethical conducts coalesced to militate the growth path of the bank. The immediate past Managing Director of the bank, Alex Otti, who jumped into partisan politics was among persons and institution alleged to have benefited from the hefty loan culture of the bank. Otti contested for governorship position in Abia under APGA but lost the election.
The current financial position of the bank which used to be one of the top five healthiest banks in Nigeria was said to have got Mr. Pascal Dozie, the founder and initiator of the bank worried and angry.
The 2015 first-quarter pre-tax profit of Diamond Bank fell by 9.5 per cent to 8.36 billion naira ($42 million) from a year earlier. The bank did not disclose why profit for the period fell but said in a statement that revenue climbed 5.8 per cent during the period to 40.48 billion naira.
The banks profit after tax also fell by 10.72 per cent to N25.48 billion in 2014, compared with N28.54 billion in 2013 as regulatory induced costs continue to suppress profit.
Its operating expenses also increased by 19.89 per cent to N92.86 billion in 2014 from N77.40 billion in 2013. Cost-to-income ratio, which measures the ability of a bank in cutting costs while boosting profit, reduced to 72.30 per cent in 2014 as against 66.57 per cent in 2013.
