UBA leads as banking sector sacks over 8,000 workers in 2020

Despite the Central Bank of Nigeria (CBN) warning against mass retrenchment, the banking sector in 2020 laid off 8,584 employees with the United Bank of Africa Plc accounting for 2,399 of the sacked employees.

According to data from the National Bureau of Statistics (NBS) released on Sunday, the banking sector reduced its total headcount by 8.2 percent to 95,026 last year from 103,610 as of December 2019.

Breakdown of the data showed 63.5 percent of the retrenched staff where on contract as headcount dropped to 39,798 from 45,350 the previous year indicating 12.2 percent or 5,454 were asked to go home.

NBS data also showed banks sacked 2,306 of their junior staff, leaving only 37,590 as of December 2020 compared to 39,896 in the same period the previous year.

Furthermore, 799 senior staff were relieved of their duties as senior staff headcount reduced to 17,381 from 18,180 the previous year.

Despite the mass sacking, the number of executive staff increased to 257 from 184 as of December 2019.

A check into the 2020 financials of Access Bank, United Bank for Africa, Guaranty Trust Bank, First Bank, Union Bank, and First City Monument Bank and analysis showed the cut-down in full-time staff.

Guaranty Trust Bank disengaged 412 workers as its staff strength fell from 5,606 in 2019 to 5,194 last year.

First bank also sent home 674 of its employees as its staff numbers dropped from 9,016 in 2019 to 8,342 last year.

Just as First City Monument Bank reduced its staff strength from 3,893 to 3,619 after disengaging 283 employees in 2020.

Access bank staff strength dropped from 6,898 in 2019 to 6,781 in 2020, while Union Bank dropped from 2,362 to 2,342.

Meanwhile the Nigerian banking industry recorded a N166.29 billion or 15.69 percent increase in non-performing loans in 2020.

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According to the report, non-performing loans in Nigerian banks increased to N1.22 trillion at the end of December 2020 from N1.059 trillion recorded the previous year.

The report noted that the non-Performing Loans (NPL) ratio is 6.02 percent above the Central Bank of Nigeria acceptable ratio of 5 percent, indicating commercial banks are carrying more underperforming loans than expected.

Breakdown of the bad debts on a sectoral basis showed that oil and gas contributed the largest share after increasing by 43 percent from N219.91 billion in December 2019 to N315.3 billion last year.

Construction followed with N170.59 billion, increasing by 97.44 percent from N86.40billion in 2019. Another biggest contributor to non-performing loans was general commerce as it recorded a 7.41 percent rise from N145.26 billion in 2019 to N156.02 billion.

Other sectors to have witnessed an increase in non-performing loans include information and communication (N112.11 billion), real estate (N56.03 billion) and finance and insurance (N5.26 billion).

Despite the rise in NPLs last year, nine sectors include agriculture, mining and quarrying, manufacturing, public utilities and transportation, power and energy, government, and education all recorded a decline in their exposure to bad debts.