Comrade Sunday Olusoji Salako is the National President of the Association of Banks, Insurance and other Financial Institutions (ASSBIFI). In this interview with OLATUNDE DODONDAWA, he explains the impact of Central Bank of Nigeria’s (CBN) intervention in Skye Bank Plc and the role of labour unions to protect workers’ interest in the sector.
After the taking over of Skye Bank Plc by the Central Bank of Nigeria (CBN), there are reports that other banks may follow. What is the situation in the banking sector?
I don’t see any real issue in the CBN’s action in Skye Bank. It is like taking a preventive measure. Maybe the CBN is of the opinion that the bank is likely to have problems if they do not act fast. That is what they have done. That is why we also tell our customers and the public that the bank is safe.
What you see is a mere change in management and it is normal. If you believe that the way the people are driving the vehicle is dangerous and may likely crash it, it is better to stop them and ask another driver to take over. This is what they have done.
Is it true that some other banks may be affected?
I don’t see any other bank having similar problem as of today. The problem is a global effect. Due to globalisation, if one economy is sick, it may affect the others. The economy isn’t doing well and of course you know the banking sector wasn’t immuned against the performance of the economy.
Once the economy becomes robust, banking activities will also become galvanised. Lots of things have happened in the last couple of months. We have the issues of the Treasury Single Account (TSA), dwindling price of crude oil in the global market and all these have impacts on the banks’ performance. If you have been exposed to the oil and gas sector and things turned out to be the way it is, definitely, it will affect their performance.
But it hasn’t got to the level whereby people will be panicking or be concerned about the soundness of the banking sector.
So, can we draw a line between mass sack in the banking sector and the dwindling economy?
One thing is very clear in Africa, especially in Nigeria, once there is a problem in any corporate entity, the employers will resort to retrenchment. You have seen overtime that it has not been the antidote to most of these problems. In fact, if you reduce the workforce, the problem may persist because it is not the antidote. There were years you have been recording huge profit and you have never increased workers’ salaries in same proportion. So when there is a challenge, it is expected that you share it together. It is impatience that leads to job cuts.
Can you assure Nigerians that workers’ plight are protected in the banking sector?
What I want us to get clear is that CBN hasn’t taken over the bank. What the CBN did, according to them, was to change the people managing the bank. Probably because they have lost touch with modern day reality or they can’t live up to the expectations.
They have not taken over the bank because Skye Bank belongs to the shareholders. As regulators, they have appointed people to manage the bank and as soon as the bank becomes stable, there could be another boardroom change and that’s what has happened. I don’t see CBN taking over any bank because CBN can only intervene to ensure good corporate governance.
For instance, if you run a logistics company with several vehicles in your fleet. If a Road Safety official observed a breach or that one of your drivers drives recklessly, he may impound the vehicle, prosecute the driver and advised you change the driver.
That doesn’t mean he is going to take over the vehicle. That’s what have happened in Skye Bank Plc.