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Banks Restructuring to Deploy Fintech Products.

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“No bank worker, whether permanent or temporary, will be sacked due to the economic slump occasioned by the current coronavirus pandemic.”

Central Bank of Nigeria (CBN) and the Bankers Committee assured workers after their meeting  yesterday that no workers will be retrenched by any employer due to the COVID-19 banking crisis and the big drop in banks revenue. 

Banks like GTBank is looking to restructure into a Holdings Company to deploy Fintech products and increase the revenue of banks following the big drop in earnings and adverse effects of COVID-19 that took most bank activities online.

The Committee’s decision followed a special meeting, held on Saturday, which was centered on “mapping out various means that will be used to help minimise and mitigate the negative impact of the COVID19 pandemic.”

Bankers’ Committee, is an umbrella body of CBN officials and managing directors of deposit money banks (DMBs). The Committee also stated: “The express approval of the Central Bank of Nigeria shall be required in the event that it becomes absolutely necessary to lay-off any such staff.”

Recall that amid speculations of mass sack in the banking industry, the sector have also seen a drastic drop in revenue before and since the inception of the coronavirus in Nigeria.

Also Read: Banking Crisis: Nigeria Banks Looking to Increase Earnings From Fintech Following the Increase in Debt Owed by Independent Oil Producing Firms.

The drastic move to sack workers came with the rise in the debt owed to banks by the oil firms in Nigeria, who are suffering a huge revenue crisis. And also the coronavirus effect that forced a lot of banks to continue most essential services online.

“In any case, the agreement was reached with the Bankers Committee. So, I expect that the CBN and the CEOs of banks must have worked out ways to cushion the rising costs of bank operations and liquidity challenges occasioned by the pandemic.

Most importantly, the Fintech platforms are taking  a cut from the bank’s revenue with the new fintech products that is currently flooding the markets. The banking crisis continues.  

Many banks are now looking to restructure and deploy fintech products into the market because the revenue generated by banks is been hampered upon from many angles.

According to a Stress Test conducted on Nigerian banks in 2020 by SBG Security. All Nigerian banks post losses ranging from negative earnings per share of N0.74 for Guaranty Trust Bank, to N7.4 for Access Bank at a cost risk of 15 percent.

Access Bank shared the largest risk count in the stress test results. These Stress tests are run in order to determine whether commercial banks are taking the needed steps to prevent failure in the event of an economic breakdown. 

These tests are done with the aim of protecting the consumers who place their funds in the trust of banks with no means to protect their funds individually aside using cryptocurrency.

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By Tony Chimdiuto

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