Uncertainty over alleged Access Bank’s bid to sack workers, close branches
Uncertainties have trailed Access Bank’s alleged closure of 340 branches across Nigeria, as the bank yesterday denied the allegations, insisting that the branches were closed at the onset of the COVID-19 lockdown.
An online media, on Saturday, May 2; quoted the Managing Director of the bank, Herbert Wigwe, to have announced the closure of over 300 branches nationwide via video conferencing in a town hall meeting with the staff.
This comes barely one year after Access acquired Diamond Bank in a $235million deal that reputedly created Africa’s largest bank by customers. Recall that in December 2018, Access had agreed to buy mid-tier lender, Diamond Bank with cash and shares, creating a bank with 29 million customers, which the two banks have said is more than any other bank in Africa.
The acquisition also reduced the number of players in Nigeria’s banking sector, where the top five banks control more than 60 percent of its assets.
Wigwe was quoted to have said he decision was in a move to reduce operating costs due to the COVID-19 pandemic.
Similarly, in regards to alleged planned mass retrenchment of its workers, Wigwe was quoted as said that about 75% of the staff, most of whom are outsourced and are offering “non-essential services,” would be affected.
But in a swift reaction, the Head Media Relations, Access Bank, Abdul Imoyo, said the allegations are not correct, noting that the branches were closed at the onset of the COVID-19 lockdown.
He said: “This is not correct. Branches were closed at the onset of the COVID-19 lockdown. As the structure of the lockdown has been relaxed, the branches will be reopened in a phased approach, and with adherence to physical distancing guidelines.
“We advised the public when we closed over 540 branches (60 left to operate) in response to our business continuity plan for a crisis of this nature. This was further buttressed by Lagos State and subsequently the FGN’s stay at home or work from home order.
“With the proposed lifting of that order from May 4th, we recognise that the threat of the virus is still out there and are planning to do a phased opening of the branches. So yes an additional 200 branches (bringing the total to 260) would be opened in the first phase.”He continued: “The staff at the frontline are also people’s sons, daughters, wives, husbands e.t.c and we have to be very mindful how we expose them. So staff would also be rotated.
“We have however made arrangements to pair the branches so customers whose branches are yet to be opened can be served from an alternate branch and those messages are going out to customers over this weekend and by Monday,” he added.
Despite the denial, a former General Secretary of Independence Shareholders Association, Adebayo Adeleke, said the decision is not unexpected because some banks’ branches are always on the same street or close locations.
“You should normally expect rationalisation of branches after the acquisition. Merging means Access Bank would have two branches on the same street all over the country. We all expected there would be closure of many branches.”
Agreeing, the Co-Founder, Shareholders Solidarity Association (NSSA), Gbadebo Olatokumbo, said: “It is not unexpected given the experiences from the other mergers in the same industry; it was bound to happen and it has happened.
“Many of the old branches of both Access/Diamond Banks were on rent, while many were very close to the other in the same vicinity, and where two branches could serve about three in the same area, definitely one that was of high cost must go.
“Again, where many were on rent, then the economic benefit of each comes into play due to the daily running cost of each branch. In-order to run a profitable modern business,many factors comes into play, which technology had simplified; while some of the excess could be utilised elsewhere.”
The Chief Research Officer, Investdata Consulting, Ambrose Omordion, describes the development as ”a strategic decision.” considering the high number of branches acquired post-merger with Diamond Bank. “Collapsing branches to one where there are many is a wise decision to manage cost, especially now that e-banking and e-commerce have become the new trend of business. This will help manage cost and time. I hope it will not affect the bank employees as promised by management.
“Financial Prudence and risk management are the in thing for corporation and businesses post-virus environment.”President, Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), Oyinkan Olasanoye, said: “There would be shutdown, because for instance, on the Adeola Odeku axis on Victoria Island, there were Access Bank and Diamond Bank, but due to the merge, they can not have up to two or three branches on the same street. The workers would be transferred to the other banks. We are only envisaging salary cut and not job losses.
”We will write them officially on Monday, (today) on the news making the rounds. We are still making our investigations.
”We have discussed with the Minister of Labour and NECA. We know there would be job losses, but due process must be followed. If they are closing their branches and transferring them to other branches, we have no problem with that, but if they are shutting down their branches and asking the workers to go, we will not accept that.
”COVID-19 is nobody’s fault, you can’t just close now and tell people to go home, I know that it will have implications but it shouldn’t be immediate.”
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