Economic Recession: Banks to shut down many branches, sack hundreds of workers.

Commercial Banks in Nigeria will close many of their "unprofitable branches" as the economic recession gets tougher.

Similarly, most of the banks would lay off hundreds of workers between now and December.

This is coming shortly after Unity Bank Plc laid off about 300 workers, more than the 220 that was mentioned last week.

Diamond Bank Plc, Ecobank and Skye Bank Plc had earlier in the year sacked over 3,000 members of their workforce.

Bankers have lamented that many of the branches have failed to justify their existence. As they spend more money on remuneration than they make as profit

An executive director in one of the affected banks said,

“We have laid off some of our staff members but that is still not enough. Many branches are just existing for the sake of being there. They are not generating enough income. What they are bringing in is far less than what the bank is incurring as costs on them.

“We may have to close such branches before the year ends. I know a number of other banks that are planning something similar.”

The economic downturn, which has led to a high rate of non-performing loans in the banking system, made four lenders to lose at least N17bn in profits in the first quarter of this year.

Specifically, Ecobank Transnational Incorporated, Guaranty Trust Bank Plc, Unity Bank Plc and Diamond Bank Plc recorded a combined decline of N17bn in their profits before tax for the three months ended March 31, 2016, when compared with the corresponding period of 2015, according to the results of the financial institutions posted on the website of the Nigerian Stock Exchange.

This is in contrast to the PBT of N30.52bn, N32.65bn, N4.26bn and N7.94bn recorded by the banks in the first quarter of 2015, the combined PBT of the four banks dropped to N17bn from N75.4bn in the first quarter of last year to N58.4bn in the same period of this year.