Nigeria Content Online

The
Nigerian Industrial Relations Association has urged Nigerian banks to
avail themselves of emerging opportunities in the industry by looking
beyond retail banking.

The
association, a member of the International Industrial Relations
Association, said banks can participate actively in the vast emerging
housing market while veering into lucrative investment banking market
and prime debt financing.

Shola
Fajana, a professor and head of the department of Industrial Relations
and Personnel Management, University of Lagos, and Secretary-Treasurer/
Contact Person of the Nigerian Industrial Relations Association said
this in Lagos on Friday at a roundtable discussion centred on
‘Industrial relations in the banking sector’.

Mr.
Fajana, while acknowledging the rapid expansion of banking system
through multiple branches, said banks need to expand their business
horizon.

“Banks
have not been able to take advantage of the booming housing
construction market, and they also have poor debt management skills.
They have not explored global prime debt markets- housing equity,
securitised debt, credit cards, housing mortgage, prime lending, and
foreign assets portfolio management among others.

“Banks
have also not explored opportunities in wholesale banking with huge
markets in re- insurance, pension fund management, commodity trading,
and collaterised debts, among others” he said.

Mr.
Fajana said major areas of concern in the banking system are issues
surrounding employment, the equitability of wages, health suitability
of working hours, the improvising of the current trends in training,
addressing employer- conflict orientation, employer union orientation,
social dialogue, the issue of staff outsourcing in relation with core
business strategies, among others.

Foundation of the crisis

Sunday
Salako, the acting National President, Association of Senior Staff of
Banks, Insurance and Financial Institutions, in his address, said the
problems of Nigerian banks are self inflicted and did not just happen
unconsciously.

Mr.
Salako said during the bank failures of the 1990s, many banks crashed,
leading to the invasion of the sector by ‘cowboys’ who took advantage
of the crisis to take over some of the then ailing institutions. “They
came with new ideas, strategies and practices that were very alien to
the system and with their zeal, vigour and support from regulators;
they set foundation for new banking culture and norm. Their focus was
aggressive deposit mobilisation using our poor and in most cases
innocent ladies as baits”.

Mr.
Salako said prior to this period, everyone who worked in the bank was a
permanent staff. “There was no casual contract or outsourced staff. The
career path was well defined and periodic training was one of the
meters for career advancement”.

“With
so much money at the disposal of our banks, it was not long before all
relevant authorities compromised and with impressive balance sheets
being cooked up, the shareholders also went gaga, leaving the entire
banking system at the mercy of these super brats. At this point, the
foundation of was laid for an imminent crisis” he said.

According
to him, this crisis, which might be prolonged, is bound to hit economic
activities beyond what was previously anticipated, adding that from all
indications recovery will be slow. “In all, the crisis has affected the
economy quickly and strongly through channels like credit crunch and
drop in foreign direct investments,” Mr. Salako said.

The
Nigerian banking industry was greatly hit by financial crisis last year
when 10 of the 24 banks failed the central bank’s special audit last
year. The central bank thereafter injected over N600 billion to save
the banks from imminent distress, after it relieved about eight
managing directors of their jobs.

However, at the last Monetary Policy Committee Meeting held earlier
in the month, the central bank noted that however fragile, the domestic
financial markets have recovered remarkably faster than expected, and
urged greater efforts in accelerating the reforms in the different
segments of the financial system to promote financial sector stability
which is critical to economic growth.