After more than two months of easing of lockdown imposed by the Federal Government to contain the spread of Covid-19 pandemic, Nigerian banks still maintain closure of some of their branches.
Investigation has shown that this is part of cost cutting measures by the lenders in the face of the economic headwind occasioned by the coronavirus disease.
“The banks have discovered that they can actually do without some of the physical branches and save cost,” Ayodeji Ebo, a Lagos-based investment professional, said.
The lockdown caused by the Covid-19 pandemic, he said, has increased the awareness and use of electronic channels (e-channels) for transactions. Also, most customers try as much as possible to avoid the banks; hence the number of customers visiting the branches will also reduce. “I don’t expect this to have much impact on operating expenses (OPEX) due to increased general cost of doing business,” Ebo said.
During the lockdown, businesses including banks were closed but the e-channels of the banks were effective.
Consequently, the value of e-payment transactions through the point of sale (PoS) terminals, Nigeria Interbank Settlement System Instant Payment (NIP) and Electronic Fund Transfer (NEFT) increased significantly by 82 percent to N11.676 trillion in May 2020, compared with the N6.421 trillion recorded in April 2020.
On May 4, 2020, the first day of the partial easing of the month-long lockdown, banks opened for business for about five hours a day.
However, some bank branches still remain closed after the second phase of easing of lockdown by the government in June 2020.
“For many of them it is part of the new normal occasioned by Covid-19 as a significant proportion of banking transactions are now conducted on line. It is also part of strategies for cutting cost.
“But, the reality is that it is creating a lot of inconvenience to bank customers who still throng the banking hall for one service or the other,” Uche Uwaleke, professor of capital market, Nasarawa State University Keffi, said.
According to Uwaleke, the rationale for a large branch network is to bring banking services closer to customers, which encourages financial inclusion. With many bank branches yet to commence operations, a lot of valuable time is wasted locating the nearest bank branch that is usually crowded with customers.
“This can be frustrating to say the least. I think the CBN should intervene and persuade the deposit money banks (DMBs) to restart most of their branches nationwide,” Uwaleke said.
As part of measure to contain the spread of the virus, Access Bank plc allowed 420 out of its 621 branches to operate during the partial lockdown. However, the bank plans to open 127 branches in the second phase of lockdown easing, and till now customers are still waiting.
“We are pleased to inform you that we will be reopening our branches across the Federation in phases, to ensure that you enjoy access to the world-class services that you are accustomed to, while maintaining health and safety standards to protect you and our employees,” the bank stated then.
First Bank of Nigeria with 750 locations opened 360 branches nationwide during the period, while 98 branches are available for Saturday card issuance.
“The disease has caused a significant reduction in social interaction and disruption in economic activities, while some public facilities have been shut down in a bit to contain the spread of the virus. The Group will continuously and closely monitor the status of the fight against the pandemic, evaluate and proactively address its impact on the Group’s financial position and performance.
“However, the Directors are confident that the Group will continue to operate into the foreseeable future,” the banks said in its second quarter financial statement.
Stanbic IBTC operated 154 out of 180 of its branches and five cash centres during the period. “Please note that our branches will be opened in phases to allow for business continuity in the event of the contamination of any of our locations. Consequently, we will inform you as we progress,” the bank stated on its website.
GTBank said, “Since the easing of lockdown procedures in Nigeria, we have operated our branches in a way that ensures customers are always safe when they visit by redesigning our physical spaces to enable social distancing, providing adequate sanitation for personal protection, alternating the opening of branches on a weekly basis and rapidly instituting a process that allows customers book their branch visits ahead of time to reduce high number of footfalls at the same time.”
