Ecobank Workers Protest Termination of Contract; Bank Insists Action Taken Without Prejudice

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Thursday, July 11, 2019  / 01.06PM  / Teslim Shitta-Bey, Managing Editor/Proshare research / Header Image Credit: WEbTV

Workers at Ecobank Nigeria Plc this morning carried out a protest at the Head Office of the bank at Victoria Island Lagos. The workers and their union representatives carried placards insisting that the bank should renew a two-year contract entered into between the bank and its contract workers in 2017.


According to a Union executive, who asked for anonymity, “we had earlier two years ago negotiated a two-year contract arrangement with the bank, with a provision for a rollover of the terms and conditions of the previous agreement on negotiated terms.” A major reason why the bank is unwilling to renew the two-year contract agreement is that it is grooming over 300 young graduates at its academy to assume full-time positions in various capacities at the deposit money institution (DMB).


Seeding Graduates for Work


The programme, according to the bank’s corporate communications department, combines three categories of Entry Level, Graduate and Management Trainees with a program duration of 2 months, 12 months and 21 months respectively.

According to the department, the bank’s training development programmes are part of its talent development strategy to produce medium to top-level banking professionals to feed into the bank’s talent pipeline. The corporate communications department notes that the programmes prepare candidates for banking careers in positions aligned with their competencies and experience at the entry point of functional pre-managerial roles.

 As part of its forward plan, the bank noted that 100 fresh graduates recently joined Ecobank at the Entry Level programme – which involved two months of training for fresh graduates in preparing them to join the Bank’s staff Corp expected to grow their experience along with the ranks.

 The bank’s first batch of 25 Graduate Trainees who passed out after 12 months of training has resumed full employment.

According to the bank’s chief executive, Mr. Patrick Akinwuntan, “This programme is our way of creating future leaders for the industry. We are investing in people to accomplish our vision as a bank. A key success factor of any bank is capital, and we must, therefore, train those who will be empowered to oversee this capital and put it to good use in the interest of depositors and investors.”

Managing “Us” Vs “Them”

The bank's strategy of training entry-level staff for integration into the bank's various operations has placed it in conflict with its contract personnel who are seeing their employment threatened by new graduate trainees, resulting in today’s protest at its head office. In a press statement released yesterday 10, July 2019 Ecobank explained the reason for the termination of its contract engagement of vendor managed personnel. According to the bank, among factors responsible for the termination of the contract were the following:

  • The bank had decided not to renew the contract of third party personnel who technically were the staff of the contracted vendor agency and not the bank. The decision not to renew the contract was consistent with the banks rebuilding strategy and its human capital development plans.
  • The bank, while rebuilding its operations through organic human capital development, decided to review its staff mix but in doing so, cater to the immediate welfare of the vendor-related personnel. The effort at reducing the impact of the disengagement of vendor-employed personnel involved the payment of N0.5bn to the staffing-vendor. Also, the bank allowed those with relevant qualifications to apply directly to the bank for permanent employment. According to the release the bank equally;
  • Provided opportunity to the contract staff to still benefit from the bank’s business value chain by becoming  Xpress point agents of Ecobank.


The bank’s press release further stated that it was not under obligation to renew the contract of the staffing vendor. The bank noted that this was particularly clear when viewing the issue in the context of the huge personnel development costs incurred to groom new graduates for permanent employment positions with the bank.


Rebuilding A Brand

In the light of recent operating challenges of the bank and the adverse impact compliance with IFRS9 and IAS21 had on the bank’s annual financial statement in 2018, the current review of internal processes, staffing and costs are understandable. The implications of the impact of IFRS9 saw the bank witnessing a fall in turnover and weakened shareholder capital resulting in the parent company providing additional capital support of USD58m in 2018.

The bank has been able to hold impairments down from N411.05m in 2017 to N263.9m in 2018. The improvement in impairment was the result of a slowing down of lending activities and a rolling back of poor credit in both the commercial banking sector of the bank’s business and Investment banking activities.


Table 1  Ecobank’s Five (5) Years Revenue and Profit Numbers 2014-2018  

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Source: Ecobank Audited Annual Accounts 2014-2018

Ecobank’s generic strategic objectives have made the staff recruitment remixing inevitable. In the last few years, the bank’s Nigerian operations have been its Achilles heel, while profitability and share of banking wallet were growing for the group in other African markets, the Nigerian market was laggard. To turn things around the bank seems to be focused on improving the share of customer banking wallet by improving staff service delivery quality and customer service experience. The improvement in customer experience is designed to create brand differentiation, thereby improving brand loyalty as well as equity (see the first quadrant of the illustration below).

Reworking the business model by Ecobank has counterpart actions across the globe as Germany’s largest bank, Deutsche Bank, plans to part with 18,000 workers worldwide as it exits the global equities business. Deutsche Bank decided on the top to bottom review of its operations as it attempts to become leaner and more profitable, thereby consolidating the business’s going concern status. Similar actions are likely to be adopted by banks other than Ecobank Nigeria in the local money market as margins thin down and banks increasingly search for best-fit market size and strategy approaches.


Illustration 1  Ecobank Nigeria’s Three (3) Generic Strategies

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