On August 14, 2009, the Central Bank of Nigeria, under Sanusi Lamido Sanusi unleashed a fresh wave of reforms in the banking sector when it directly intervened in the management of 8 banks that had failed the stress test conducted by the apex bank to ascertain the state of health of the nation's banking industry. The affected banks were Oceanic Bank, Intercontinental Bank, Finbank, Afribank, Bank PHB, Spring Bank, Union Bank and the Equatorial Trust Bank. The regulatory authorities and many industry insiders were unanimous in their applause for the CBN for the drastic step it had taken on the banks. Key among the underlying rationale for the CBN intervention was the total collapse of corporate governance in the affected banks. This was very much in evidence in the mind-boggling revelations on the brazen abuse of office by the top management of the banks that was to follow in subsequent court appearances. Some of the malfeasances were gross depletion of the assets, shareholders' funds and mounting bad debt profile of the affected banks.Before the CBN intervention, the banks were clinically dead as financial institutions. The safety measures adopted by the CBN were widely acclaimed as decisive, timely and restorative, offering practical approaches to saving the institutions with minimal damages. The intervention and the accompanied reflation of the banks practically saved the banks from imminent liquidation. Thus, the Nigerian economy, the banking industry, depositors, staff and other stakeholders were saved from the unpleasant consequences of liquidating 8 banks in one fell swoop in an economy that was still in the throes of recession.The newly appointed management teams of the affected banks were promptly saddled with the task of safeguarding depositors' funds, stabilizing the institutions and restoring the public confidence in the banks. However, no sooner had they settled into their task than the shareholders of the affected banks, under different disguises, took the CBN to court attempting to reclaim 'their' banks, which they could do nothing to save under their very noses before the CBN intervention. In addition, the new management teams had to contend with the issues of bad debts, poor customer care, dispirited staff and other shareholders issues.At the end of their two-year tenure, three banks were unable to meet the recapitalization requirements. This in turn led to the creation of bridge banks on August 5, 2011 by AMCON to take over the assets and some liabilities of the three banks. The new three bridged banks, the first of their kind in the nation's history, now transmuted into Keystone Bank Limited (former Bank PHB), Mainstreet Bank Limited (former Afribank Nigeria Plc) and Enterprise Bank Limited (former Spring Bank). A total sum of N679billion was injected into the three banks to keep them afloat and competitive in the market. New management teams and boards were appointed by AMCON, which now owns the banks on behalf of the CBN. The mandate of the new management teams was clear: to run the banks like typical business enterprises and turn them around for eventual acquisition by new investors/owners. AMCON demonstrated its seriousness on this by ensuring that tested professionals, seasoned bankers, administrators and management experts with integrity were appointed into management and boards of the three banks. This is paying off.Keenly conscious of their mandate, the managements of these banks have continued to work really hard to improve the worth of the institutions and return them to instant profit. This has proven a herculean challenge, as they have had to contend with local and global challenges that are threatening the existence of long and well-established brands. But the administrators of the banks have proven in short a time to be up to the task. The restoration of public confidence and stability as indicated by the fact that none of the banks experienced a run by customers is a clear pointer to their uncanny creativity.Amidst several hurdles, they have variously deployed survival and competition strategies that are yielding results while their brand equity is on the rise. And it is thanks largely to the comprehensive business review and reengineering of operations they had carried out in those banks.Expectedly, a few niggling issues stand between them and the fulfillment of their mandate. Some of them, it is now understood, had discovered to their horror that some of the legacy banks were nothing but white sepulchers, harbouring decaying cadavers of diverse shapes. There have been reported cases of momentous frauds that were neatly hidden away in the books of the legacy banks, a preponderance of poorly trained and ill-motivated staff as well as structural inadequacies that would take an insider to notice. So, they have had to quickly pull up their shirts sleeves and draw up diverse strategies that would ensure their survival in a fiercely competitive industry.But the most debilitating challenge they have faced so far seems to be how to handle the human element, what to do with an army of unproductive staffers they inherited from the defunct banks.It is interesting to note that in the last few months, the most consistent piece of news emanating from the nation's banking sector has been the news of staff rationalization or rightsizing. This phenomenon has been spreading so wide that even the large and thriving banks have laid off a sizeable number of their staff members in recent times. This exercise has been largely fractious in most cases with Access Bank and Ecobank handling of staff inherited from the defunct Intercontinental Bank and Oceanic Bank attracting the most controversy. Lately, UBA, Zenith, Fidelity and FCMB were also reported to have retrenched some workers. Among the bridge banks, the management of Enterprise Bank has laid off a number of staffers from the legacy bank who could not adapt to the new dispensation of things in the bank.Mainstreet Bank seems to have adopted a totally different strategy to handle the challenge. The strategy that the bank has chosen to tackle it is the closest attempt to give the nebulous issue of employee disengagement a 'human face'. It would seem that the new management of the bank had realized the peculiarity of its legacy bank, which used to be the hotbed of union activities and has decided to tread cautiously. Unlike its peers, Mainstreet Bank is said to have initially shunned the temptation to retrench its large number of staffers and has instead redirected its energy to repositioning the bank, retooling its decayed processes, re-awakening the morale of staff and setting down the structures for a speedy return to profit. Industry watchers claim that in addition to launching a remarkable corporate image campaign to introduce the new brand into the consciousness of the banking public in December last year, the bank also held a hugely successful strategic retreat to draw a road map for success.Renowned financial markets analyst and CEO of Financial Derivatives, Bismark Rewane was reportedly hired by the bank to recharge the intellectual batteries of the board and stimulate a productive debate at the strategy session. It was also reported that the management of the bank had embarked on extensive consultation with diverse stakeholders including the in-house staff union under NUBIFIE and the Labour Ministry to adopt a mutually acceptable approach to resolving the human capital challenge in the bank.Remarkably, out of these consultations emerged the highly commendable voluntary exit option, which the bank's management in agreement with the Board had extended to staff members that had been in its employ for 20 years. The option comes with two years ex-gratia basic salary and the forfeiture of car loans and status car for any eligible staffer who wishes to go. In addition to this, all staffers of the bank that had attained the retirement age of 55 and above were given encouragement to seize this window of opportunity and exit the bank. After over two weeks of this unusual grace period, 33 members of staff that fell within this retirement age were asked to leave the employ of the bank.As is expected of any organization that wishes to make a fruitful transition to profit, Mainstreet Bank has simultaneously embarked on the strategic hiring of competent, result-driven staff to beef up key functions and return the bank to the road to renewal. A comprehensive appraisal of the inherited staff from the legacy bank to facilitate the immediate confirmation of their appointment has been going on and the general staff morale is once again on the upswing.The bank is also remodeling select branches and key outlets to convey a picture of change while its array of products is being repackaged for the market.It would seem from the above picture that Mainstreet Bank has proven that the usually vexatious issue of inherited employees of affected companies in mergers and acquisitions can indeed be handled to the satisfaction of all parties with greater tact and extensive consultation.
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