Human Resource Implications Of The Consolidation Of The Nigeria Banking Sector

Human Resource Implications Of The Consolidation Of The Nigeria Banking Sector. An In-Depth Study Of First Bank Of Nigerian Plc Enugu Main Branch.

Abstract

          Human Resource Previously known as Personnel Management has been used to describe that function of Management that deals with the recruitment, employment training, redeployment, safety, welfare and departure of employees in an organization. The managing of human resources aims to achieve employees’ good relationship, efficiency, fairness and justices, the capacity development of the employee enablement and equal contribution, fair terms and conditions of employment and satisfying work for those employed.

It is against this definition that this work x-rays the implication of Human Resources of the Consolidation of the Nigeria Banking Sector.

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To x-ray, this work, research methodology was used gathering relevant facts, analyzing them and drawing meaningful conclusion so that the objective of the work could be achieved. Research design was used in affirmative of structural research frame work which serves as a road map or plan of action showing what and low the researcher will carry out step by step procedure of accomplishing the research endeavour.

Data was collected using observation, questionnaire, and interview. Descriptive analysis was also used in detail study.

The major findings and recommendations were as followed:

  1. That the consolidation exercise embarked upon by Nigeria Federal Government has negative and positive implication to human resources.
  2. That is exercise increased the standard of Nigeria banking system to equate it with banking system of other countries.

The work recommends that government and private sector should create jobs to absorb those affected by the exercise and create enabling laws to harmonize the glaring problems of merger, acquisition and consolidation of other sectors to boost the Nigeria economy.

CHAPTER ONE

1.0INTRODUCTION

          The banking sector around the world has witnessed remarkable changes in recent decade given the increasing wave of globalization, structural and technological changes and integration of financial markets. As Mckinnon and Shaw (1973) observed in their seminar work on the key roles of banks as propellants of growth and development in developing economies a feeble banking system is repressive, distortionary and disconnects the intermediation process thereby precipitating macro economic instability. This requires that policy makers as Nnanna (2005) opines must anticipate robust policies that will deepen play their roles most efficiently.

In Nigeria the ability of the banking industry to play its role has been periodically punctuated by it vulnerability to systematic distress and macro economic volatility, making policy time-tuning inevitable. Nnanna (2005) showed that, historically the Nigerian banking industry had evolved in fair stages. The first stage “un-guided laisez fair” phase (1930-59 second stage, the control regime (1960 -1985).

The third stage was post structural adjustment programme or de-control regime (1986-2004). The fourth stage is The era of consolidation (2004 to a foreseeable future).

The banking sector reforms (consolidation) is focused on further liberalization of banking business ensuring competition and safety of the system and proactively positioning the industry to perform the role of intermediation and playing a catalytic role in economic development.

1.1     Background Of Study 

Before the consolidation of Nigeria banking sector, there were two distinct differences in banking administrative management. Generally then banks were classified as either new generation or old generation banks.

The old generation banks practiced and carries out banking in old known orthodox banking guidelines, whereas the new generation banks introduced new innovations which even in some cases the old generation banks considered antithetical. New generation banks paid higher salaries with offer of modern elegant cars to identify good staff, thereby, living away good, well-trained staff from the older banks and gave them top managerial posts. They tinkered with and negotiated interest rates with business customers with big deposits and heavy columns of money transactions.

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Before this era, people who studied accountancy, banking and finance were those who sort and get employed in the banking sector. With banks spinning up here and there at the rate they did, accountancy, and banking and finance certificate holders in the bank labour market were not enough for the banks. The new generation banks started recruiting staff with any background. Food Technologists, Artists, Engineering graduates were employed just to mention a few. They quickly trained those new entrants and used them. Those that could not cope dropped out by themselves, these, banks considered unmanageable, were laid off. Soon after, older banks started copying the new generation banks tactics like the fast lane track dealing with the customers and their recruitment style of employing staff from other discipline of studies and training them.

Sanitization and consolidation policies of the central bank cut the banks to size. Those who could not cope with the conditions, those who were banking without following the process and were not ready or able to follow the new central banks directives and control found their way out. Many others merged with the stranger ones. The stage was therefore new set for proper administration in banking sector. Modern banking administration naturally exposes itself to human resources management practices.

Nwachukwu (1988:1) pointed out that the building up and efficiency of an organization whether private or public depends to a large extent, on how effectively human resources are utilized. Banks pays particular attention to the management of their human resource to succeed. Human resources in banks contribute in making the difference not only in the number of customer patronage but also in the profits the banks make.

Imaga (2001:88) stated that the level of productivity or output in any organization or country for that matter is a function of the combination of material and human resource in which the human resource plays a double role of labouring and organizing the other resources or factors of production, the situation becomes clear if, for instance, we take GDP i.e. gross domestic product, to represent the total output of a nation in a given accounting period, then GDP =LKH.

Where

L =     labour

K =    capital

H=     management skill.

That is assuming that land as a factor of production is constant and equally given in all organization or in such production scenarios dominated by the nature of service.

Thus in H, which refers to human resources, we have all the elements of skills, ingenuity, wisdom and intelligent which are the attribute of human being other than what it takes to exhibit sheer brute   force as in raw labour. This brings us to the question of positive or negative implication of the consolidation to human resource in banking sector.

During consolidation era many human resources (personnel) were lay –off as a result of duplications of duties in the merged 25 banks out of 89. For those who were laid off, what is their faith? For the retained fraction, in this era of post consolidation, efficient management of personnel in banks becomes the major fulcrum on which the leverage column of profits rests. Hence comparing banks of the same consolidation base and the same operational opportunities, the bank that best manages her human resource generally, best maximized her profit as well as her customers’ satisfactions.

Banks these days seriously and continually embark on recruitment, training, laying off, promotions and many other human resources management techniques and programme in an effort to maximize their profit and maintain leadership position as a way of competitive edge over their competitors.

  • Statement Of The Problem
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          Initially the strength of a bank was measured by its ability to withstand shock or manage risk some banks went under due to bad loan or loss of major accounts. There existed big disparities in the financial resources of different banks. The threat of distress weighed down on banks that were new in the industry. Thanks to consolidation all banks now play on level ground in terms of funding.

In order to grow and progress in this consolidation era banks require efficient human resource (staff) to pilot their affairs. Due to the stiff competition created by consolidation the rendering of excellent and quality services has work proves to be more demanding employees in turn expect rewarding remunerations.

Good knowledge of banking service necessitates training and development. For bank to have advantage over others the human resource need to be well informed especially if the bank is very dynamic changing and introducing new products and services to meet the needs of customers.

The issue lies on how banks have reviewed their human resource policies so as to retain  and recruit the best hands in the sector since capital is sufficient, labour and management still need to be improved on, to boost productivity, motivation, evaluation of performance and human resource planning require reconsideration in this period.

With the point so far raised, the  researcher considered it wise to investigate the implication of human resources in the banking sector consolidation using First Bank Nigeria Plc as a case study to known how human resource were ferring on the era of consolidation

1.3     Objectives Of The Study

  1. To identify the positive and negative implication of consolidation to human resource.
  2. To identify the human resources factors that is critical to successful consolidation.

iii       To critically assess the extent to which these banks have        realized their human resources goals and objectives           since consolidation.

  1. To examine the extent to which current motivational techniques for personnel in the banks are able to ensure optimum productivity.
  2. To ascertain the extent consolidation of bank sector has affected recruitment of staff in the banks.

1.4     Research Questions

The research questions asserted to this study are as follows:

  1. What positive effect has consolidation to human resource?
  2. What negative effect has consolidation to human resource?
  3. How has the First Bank of Nigeria Plc managed their human resource problems created by consolidation?
  4. What are the necessary training and development programme required for First Bank staff to maintain the leadership position in    the banking sector?
  5. To what extent will the current motivational techniques for banks    improve their productivity?
  6. What recruitment techniques have the Banks adopted since consolidation to help them achieve their human resources goals?
  7. What negative effect has post consolidation on human resource of the banks?

1.5     Significance Of The Study 

The examination of human resource management at the First Bank of Nigeria Plc will be of immense significance to the bank itself and to any interested reader and researcher as well.

Eventually, the extent to which human resource management is practiced at the bank will be identified. Several findings and recommendation can be of use to any other consolidated bank as well as First Bank Nigeria Plc itself. The study will reveal some of the shortcoming cum problems and prospects of human resource management in Nigerian banking sector.

It is also expected to highlight the important of banks economic services of the nation. This will create awareness in the minds of individuals, organizations government officials, philanthropists and institutions. It will as well form a basis for further research work in future.

1.6     Scope Of The Study

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The study is intended to x-ray the positive and negative implication of consolidation of Nigerian banking sector to human resources. The process and practice of managing

human resource at the First Bank Nigeria Plc Enugu. It also intended to examine the place of human resource in the bank, its functions, shortcoming, problems and prospects.

1.7     Limitations Of The Study

Due to limitations imposed by financial resources and time, the researcher is compelled to draw this samples from within Enugu, especially around the bank owing to the banks operational exigencies it is not quite simple to obtain the primary data for instance, there could be an emergency security wise either at the time an officer was needed for an interview or when the officer had to complete a questionnaire. It is perhaps sufficient to state that an in depth inquiry was quite difficult and required a very long time with several visits. As much time was not easily available, the research gathered as much as was possible during some visits.

It is pertinent to note that the researcher did not attempt to review the conditions of over 45,000 employees laid off as a result of consolidation. Reason being that such in-depth study need huge financial strength to embark on. Summary study show that during the consolidation Sykebank laid-off 320 employees in February 2006, IBTC character bank 117, Wemabank 450, Union bank 500 and retried 224, Spring bank 3000, Afribank 385 and so on.

The aftermath condition of those banking employees laid-off is a fertile ground for further study.

1.8     A Profile Of First Bank Of Nigeria Plc

The business of modern banking was started in Nigeria in 1894 by the Bank of British West Africa to which the standard Bank of Nigeria Limited (now First Bank of Nigeria Plc) is a successor bank. There was no banking legislation of any kind then; neither a Central Bank nor a ministry of finance with a role in the control of Banks emerged until 1958.

First Bank of Nigeria Plc has the credit of being the first established bank to practice the business of banking in Nigeria. It monopolized banking business unit 1925 when Barclay’s Bank now United bank of Africa, opened a branch in Lagos. The first banking operation in Nigeria at a contain juncture in its history changed its name to standard Bank for West Africa (SBWA) and later to standard Bank (Nig) limited. In 1978, the current name First Bank of Nigeria Ltd. (now Plc) evolved.

Even after meeting the consolidation requirement solely, First Bank merged with FBN Merchant Bank Ltd MBC international Bank Ltd, NBM Bank Ltd, and Trust Bank of Africa in 2005 to increase its capital base to over N50 billion

Naira. Currently the bank has over 4000 branches nation wide and offices in South Africa and United Kingdom.

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