As the news of Access Bank’s likely merger with tier two lender, Diamond Bank continues to filter into the financial system, one thing that would be uppermost on the mind of staff of both entities is job security. Nairametrics looks at the staff strength of both banks and the likely options going forward.
Current staff strength
Figures from Diamond bank’s financial statements for the year ended December 2017, showed the bank had a total of 3,280 staff. Access bank according to its financial statements for the 2017 financial year, had a total of 3,190 staff.
What could happen?
While Access Bank would be wary of laying off any staff immediately, to prevent unrest from the unions in the banking sector (such as ASSIBIFI), some form of staff optimisation is bound to happen. The two banks have nearly the same number of employees and several overlapping branches and departments. While Access Bank has over 300 branches, Diamond Bank has 279 branches as at the nine months ended September 2017.
Access Bank would be under pressure from investors, to provide proof of cost synergies arising from the deal. Being the dominant partner, however, there would be more cuts on the Diamond Bank side of the deal.
The resulting entity would most likely offer a generous exit package for Diamond Bank staff willing to leave.
Precedence gives a clue
Following Access Bank’s acquisition of Intercontinental Bank in 2012, over 1,000 staff of the defunct bank were reportedly laid off. Some branches were also shut down. Prior to this, staff salaries were also reportedly slashed by 30%.
Other mergers and acquisitions in the banking industry have often led to laying off staff.
In 2012, FCMB paid off 550 staff of the defunct Finbank who opted to resign. 44 Finbank branches were also shut down as they were either not profitable or close to FCMB branches that were profitable. 320 FCMB staff were also laid off.