Despite the economy slowly recovering from the disastrous effects of COVID-19, banks may have kept offloading surplus payrolls.
At the height of the pandemic, banks shuttered some of its locations, which resulted in a general reduction in staff. But despite the increased operational costs and the need for greater customer satisfaction, the number keeps declining.
As of December 31, 2021, there were 186,180 employees throughout all categories and subsectors, which is 4% fewer than the 96,975 employees the sector had at the end of the previous year, according to data issued by the National Bureau of Statistics (NBS).
The statistics show that the number of employees in the various subcategories of the financial services sector—commercial, microfinance, and non-interest banks.
The number of employees at the banks has been declining since 2018, when it was 104,669. In 2019, the year before to COVID-19, it slightly decreased to 103,610.
Detail research reveals that the sector’s casualization of labor has resisted efforts to reduce it, as it was still 42.5% by the end of the previous year.
The percentage of casual employees trended downward in 2020 from the 43.7 percent recorded in 2019 to 41.9 percent, only to modestly increase to 42.5 percent last year.
According to the research, there are 775 employees overall at microfinance institutions, compared to 90,455 at commercial banks. An estimated 1,925 institutions do not charge interest.
The banks were reportedly under pressure from The Guardian to deploy technology to save labor costs.
Dr. Austen Nwaze, a member of the Lagos Business School faculty, commented on the aggressive staff cost-cutting initiatives by saying that the practice could increase employee stress and result in decreased productivity.
The natural result of employment uncertainty in a trust-based industry like banking, according to applied economics professor Godwin Owoh, is a rise in fraud. People who are aware that their jobs are insecure will take advantage of any chance to borrow money from their employers in order to secure their financial future.
The performance of the sector in terms of credit and portfolio spread across sectors was also emphasized in the study.
“The total credit allocated to the private sector in Q1 2021 stood at N62.28 trillion. The top three credit allocations went into the oil and gas, industrial sector, manufacturing sector and the general service sector with N11.97trillion (19.22 per cent), N9.82 trillion (15.77 per cent) and N5.55 trillion (8.92 per cent) respectively.
“Similarly, in Q2 2021, total credit allocation increased by 5.64 per cent to N65.79 trillion, with the top three allocations to the oil and gas industrial sector, manufacturing sector, and general service sector recorded at N12.34trn (18.75 per cent), N10.83 trillion (16.46 per cent) and N6.24 trillion (9.48 per cent) respectively.
The Q3 2021 credit allocations to the private sector further increased by 2.33 per cent from the amount recorded in Q2 2021, showing a total of N67.33 trillion. Of this amount, allocation to the oil and gas industrial sector stood top at N12.32 trillion (18.29 per cent), followed by the manufacturing sector with N11.14 trillion (16.55 per cent) and the general service sector with N6.49 trillion (9.64 per cent).
“In addition, N71.71 trillion was reported as a credit to the private sector in Q4 2021, indicating a growth rate of 6.52 per cent from Q3 2021. Again, the oil and gas industrial sector recorded the highest allocation with N12.48 trillion (17.4 per cent), followed by the manufacturing sector with N12.16 trillion (16.96 per cent) and the general service sector with N7.08trn (9.87 per cent),” the report details.