Ecobank shuts 74 branches, switches to digital channels

The economic crunch in Nigeria is taking its toll on Ecobank Nigeria Limited, and to tackle this challenge, the lender has decided to shut down 74 of its branches, reducing local outfits from 479 to 405, as it switches to digital channels.

In a related development, Sterling Bank debunked reports that it sacked 650 staff members, explaining that it only returned the affected workers to service providers that had earlier assigned them to work with the bank.

Commenting on the development at Ecobank, the Group Managing Director, Mr. Charles Kie, in an emailed document said the move was part of the bank’s transformation agenda which is meant to create a fundamental shift of its banking activities to digital channels, as well as improve customers’ experience, while also reducing the cost of serving them.

He said that this is also to support the bank’s financial inclusion strategy and the cashless policy of the Central Bank of Nigeria (CBN).

According to him, “This strategy, the bank has enhanced its Retail Internet Banking platform with much speed and flexibility. Also the Ecobank Mobile App that enables customers does instant payments; open accounts, as well as do instant transfers across 33 countries in Africa.”

He added that the bank has therefore decided to merge some of its branches across the country. With the merger Ecobank now boasts of 405 branches across the country supported with top of the range technology application.

“After a detailed analysis of the physical network of branches needed to serve our customers, the decision was made by the Ecobank Nigeria Board, and approved by the Central Bank of Nigeria, to optimize 74 out of its 479 branches”, he explained.

He stated that the impact on staff will be minimal, as most of the staff in the affected branches will be moved to other projects.

In his words “We are deploying staff and other resources from the merged branches to other ongoing projects, while also strengthening the existing branches to make them more resourceful and up to speed in their daily activities.”

He reiterated that this is a well thought through decision expected to fundamentally shape Ecobank’s business for better performance.

The lender declared a N52.6 billion loss at then of 2016 financial year, following its decision to write-off its huge impairments, even though it returned to profitability at first three months of this year, posting a N18.7 billion profit after tax, which was 15 percent higher than the N16.2 billion it declared in Q1 2016.

Ecobank gross earnings was grew to N178.4 billion in Q1 2017, 36 per cent better than N131.39 billion it generated in Q1 2016.

The bank’s total assets rose by 36 per cent from N4.6 trillion in 2016 to NN6.26 trillion as at March 2017, driven by 28 per cent increase in loans and advances to customers to N2.8 trillion as at March 2017 from N2.2 trillion recorded in 2016 financial year results.

Ecobank balance sheet was buoyed by 32 per cent increase in deposits from customers to N4.15 trillion at the end of March 2017 and 12 per cent increase in total equity from N505.5 billion in 2016 to N565.7 billion in Q1 2017.

Mr Ade Ayeyemi, the bank’s Group Chief Executive Officer in a statement explained: “Our performance in the first quarter was encouraging despite continued macroeconomic headwinds.

“Our first quarter revenues of $425 million (N130 billion), increased three per cent in constant dollars, while operating expenses were flat, year-on-year.

He revealed that Ecobank made meaningful progress in its strategy, which focuses on cost discipline, stringent credit risk practices, and digitization of processes to enhance the customer experience.

On the part of Sterling Bank, the lender said that it only returned the affected workers to service providers that had earlier assigned them to work with the bank.

The bank in a clarification document said it had initially refrained from issuing a statement to counter the mischievous claim, “the spread of the falsehood by online reporters has compelled us to come up with this statement to put the record straight.”

It said: “Specifically, the 650 staff being reported are not staff of Sterling Bank Plc. They were assigned to the bank by our service providers and as contained in the Service Level Agreements (SLA), they can be returned to the service providers for reassignment to any other institution by the service providers as they deem fit.

“As an organisation, we have, over the years invested heavily in making Sterling Bank a great place to work for our staff and this has endeared them to the Bank.”

Sterling Bank said the number of staff from other banks willing to join Sterling Bank has also remained high.

“Despite the poor economic situation with institutions laying off staff, Sterling Bank in the last 11 years of its corporate existence, has established itself as institution that is employee’s delight.

“Indeed, if you are looking for an institution that cares about its people, Sterling Bank is it. The bank has continued to build its staff into the best they could be and recognises their contributions to its success,” the bank said in the statement.

It further stated that Sterling Bank is managed as a business “that cares about its people though operating in an industry that is known for empathy towards employees.”