CBN Dismisses Forced Exit Claims, Says 1,000 Staff Exited Voluntary with Full Benefits

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, on Friday, said the apex bank’s staff who left service in December last year initiated their voluntary disengagement with payment of full benefits.

Cardoso, who said this during the resumed investigative hearing to probe the disengagement of the 1,000 workers and how the N50 billion terminal benefits was arrived at for them, noted that the 1,000 members of staff who were disengaged were not forced to quit.

This emerged as analysts on Friday predicted a wave of mergers among the tier-2 banks as more financial institutions take steps to beat the recapitalisation directive of the CBN.

The investigative hearing to probe the disengagement of the 1,000 staff of the apex bank was held at the instance of the House of Representatives Ad-hoc Committee to probe the matter, chaired by Hon. Usman Bello Kumo.

The CBN Governor who was represented by the Deputy Director Corporate Service, Mr. Bala Bello, stated that the issue of the early exit programme and the restructuring as well as reorganisation was to optimise the bank for enhanced efficiency.

He said: “They are ways and means through which the performance of an organisation is optimised by putting, ensuring that round pegs are put in right holes. The manpower requirement of the bank is met. The man-loading, which is the key responsibilities, key performance indicators of the bank, vis-a-vis the number of people driving the performance of that bank, is at a level where it’s optimum, balancing the human resource requirement, the capital requirement, the skills requirement, as well as the IT requirement of the bank.

“You are very much aware, Chairman, the entire world is going through a process of digitising its operations. And then once that is done, a lot of opportunities are created, just like a lot of redundancies are also equally created. And you have had instances in which, in the past, the request for staff to actually exit the bank voluntarily actually emanated on the part of the staff. And I believe the central bank is not necessarily the first organisation to have done that. I’m very happy to mention, Mr. Chairman and members of the committee, that the early exit programme of the Central Bank is 100 per cent voluntary.

“It’s not mandatory. Nobody has been asked to leave, and nobody has been forced to leave. It’s a completely voluntary programme that has been put in place. I believe several organisations across the world, and even within this country, both in terms of the private sector and the public sector, are undertaking similar exercises.

“So nobody has been asked to leave. But people who are based on popular demand, I have to be humble, with a lot of humility, to tell you that this same programme that is taking place is not at the instance of the bank itself.”

He further said, “Of course, we have our challenges, and we know where we want to take the bank to. That’s Cardoso and his team, myself included. But this popular request came from the staff.In the past, you have had instances in which cases of stagnation and lack of career progression appear. I mean, in an organisation, you’ve got a pyramid where from each level to the next level, you know, the gap keeps narrowing. If not, you are going to have a quasi-organisation, inverted pyramid.

“It doesn’t work. It gets to the level where you have, for example, 30 departments in the central bank. You cannot have 60 directors, manning 30 departments. It’s not going to work. So, once those vacancies are filled, it gets to a level where some people, even though they are very qualified, are very able, and they are very willing, but the vacancies are not there. And then they got to a level where they stagnated for a period of time.

“There are several instances in which similar exercise took place in the central bank, which has happened several times. This is not the first time. It’s not the second time. It’s not the third time. It’s several times. You’ve had instances in which people at the top request that, look, it’s going to take me X number of years to actually aspire to become a director in an organisation. But right now, there’s no vacancy. And the person sitting next to me probably has eight years to go. Meanwhile, I have seven.”

He further stated that, “So there’s no career growth. And a lot of opportunities are out there. For example, among the people that have left, there are, like, three or four people who are going to set up a bank. The approach that we told them, literally, anything you want to do, if you need the support of the central bank, you are done.

“So the popular demand then was at the top, people that are stagnated, people that don’t have any career progression any longer, they have reached their peak, and they are willing to go and take other risks before they get to an age where they become scared to take risks.

“You know, those programmes are put in place to ensure that those people are allowed to actually exit to go and start other things with their lives. But in this particular case, based on popular request, and I came with the Union Leader of the Bank, the staff requested that in this case, similar opportunities should be extended to other categories of staff. In the entire system, in the entire period, in the entire time that similar exercise has taken place, it’s only people within a certain cadre, within the director cadre. The deputy director and directors who feel they want to go and start some other things, and assistant directors are given”

“But for the first time in the over 60 years history of the bank, the early exit program is extended to everybody who is actually willing to take it. And this came at the instance of the staff. So it’s not mandatory, it’s not compulsory, there’s no coercion, there’s no forceful exit, and there’s no intimidation for anybody to take it. In fact, when this same thing has been, you know, approved, was approved by the Bank, and it was open, the number of staff that actually came forward to take it was even very amazing. Like I told you, there are some other people that are even thinking of going to start with the bank. So if the impression comes to this place that we are laying off, nobody is going to do this. It’s the line of anybody. Nobody did it. It’s an entirely voluntary exercise on the part of the Bank.”

He maintained that “Those who want to take it, took it, and those who don’t want to take it are still in the bank. And then again, sir, the issue of reorganisation, restructuring, and I added realignment, these are basically, it all depends on how you want to describe an elephant. Whether you want to describe it as a snake that has a long tail, or whether you want to describe it as a rock because you are touching the body, or whether you want to describe it as a knife because you are touching the hunk. They technically mean the same thing. It’s all about optimisation and making sure that the organisation, vision, and mission is aligned with the manpower you come in, considering the man-loading.

“The man-loading is how many people it takes to do a particular job, and how many hours do you need to put in. For example, if you are going to spend 40 hours, and you have like 10 people to do two jobs, well, it doesn’t hurt anybody. These are Nigerians. If they are there, they don’t hurt anybody. But there are people who are actually voracious. They want to do more.

“These are the people who feel that if we have this opportunity, we can go and start all that. And it was absolutely going to, and you can call me anytime, anywhere, and that’s what it is. Nobody has been forced to leave. Nobody has been dictated to leave. Nobody has been stamped into leaving at all. It’s strictly voluntary. If nobody had taken it, we would have just closed it. But this came as a result of popular demand. Like I said, I came with a representative from the staff unit to actually say it here.”

Meanwhile, as more financial institutions take steps to beat the recapitalisation directive of the Central Bank of Nigeria (CBN), financial market analysts have predicted a wave of mergers among the tier-2 banks.

This, they argued, would be less about meeting regulatory capital thresholds and more about positioning to compete effectively with the tier-1 banks, which dominate the industry.

The deadline for the recapitalisation exercise that requires banks to hold minimum capital of N500 billion, N200 billion and N50 billion for commercial banks with international, national, and regional licences respectively would elapse March 31st next year. Presently, only Access Bank has finalised its recapitalisation process.

Already, among the tier-2 banks, Providus Bank and Unity Bank, have entered into a business combination deal.

However, speaking with THISDAY, the analysts emphasised that while some tier-2 banks appear poised to meet the recapitalisation requirements, many would likely undertake significant structural adjustments to enhance their competitiveness.

Head of Financial Institutions Ratings at Agusto & Co., Ayokunle Olubunmi, noted that the recapitalisation process was set to reshape the Nigerian banking landscape, potentially altering the hierarchy of banks.

“Overall, most of the tier-2 banks are on track. For the majority of banks, raising capital isn’t the issue; the real question is, for those with weaker financial positions, what are they willing to give up?” Olubunmi said.

He added, “After recapitalisation, the banking landscape will shift. For instance, non-interest banks with lower recapitalisation thresholds are likely to promote mergers not due to an inability to meet requirements but to enhance efficiency. Smaller banks may also merge to become more profitable and efficient rather than being unable to meet the recapitalisation target.”

Olubunmi also stressed the unpredictability of the situation, pointing to the last recapitalisation exercise, which saw significant changes late in the process.

“It’s still too early to predict the full outcome. If you recall the last recapitalisation exercise, uncertainty persisted until the final moments. By December 2025, with the March 2026 deadline approaching, we should have a clearer picture,” he explained.

“There’s still the possibility of larger banks acquiring smaller ones, even those that meet recapitalisation requirements. After the exercise, the tier-1 banking hierarchy could change, with one or two tier-2 banks potentially joining the top tier. It’s also plausible for a tier-2 bank to overtake a current tier-1 institution,” he concluded.

Similarly, Managing Director and CEO of Anchoria Advisory Services, Sam Chidoka, whose firm has been involved in capital raising for a tier-2 bank, underscored the importance of balance sheet size in the evolving banking sector.

“For tier-2 banks, I think it will be a combination of capital raises, acquisitions, and potentially some mergers,” Chidoka said.

“To effectively compete with the tier-1 banks, there might need to be horizontal mergers among tier-2 banks. This is also an opportunity for some tier-2 banks to acquire smaller tier-3 banks to bolster their balance sheets and strengthen their market position,” he added.

Chidoka noted that larger balance sheets enable banks to underwrite and issue substantial loans, which would be a key competitive factor in the future.

“Tier-2 banks will need to consider mergers among themselves and the acquisition of tier-3 banks to remain competitive against tier-1 institutions,” he said.

When asked about the possibility of tier-2 banks being acquired by tier-1 banks, Chidoka expressed doubt.

 “I don’t think so. I don’t believe any tier-2 banks would want to be acquired by a tier-1 bank. Most of the tier-1 banks will be fine in terms of capital raising. However, mergers and acquisitions can be quite disruptive. Anyone who has experienced one knows it’s not always the first option,” he said.

“While it’s easy to suggest being acquired or merging, in practice, it can come with short-term challenges. I think tier-2 banks will try to survive independently rather than get acquired, at least in the immediate term,” Chidoka added.

Analysts at Afrinvest Securities Limited highlighted challenges smaller banks face in their 2024–2025 outlook report titled, “Beyond the Rhetorics: Transforming Reforms to Tangibles.”

“For 2025, the banking sector’s performance will be a benchmark for broader economic growth, with implications for financial inclusion, credit access, and sectoral diversification beyond oil,” the report stated.

Afrinvest also pointed to potential trade-offs associated with consolidation, comparing the current process to the 2005 reforms that significantly reduced the number of banks in Nigeria.

“Bank recapitalisation comes with trade-offs. Consolidation, reminiscent of the 2005 reforms that reduced Nigeria’s banks from 89 to 26, may lead to mergers, acquisitions, and potentially significant job losses. For employees and smaller banks, 2025 could be a year of adaptation or attrition,” the report noted.

“We are optimistic this would lead to a more resilient banking industry. Nonetheless, continued FX and inflation pressure could undermine the USD valuation of the capital base at the end of the exercise,” Afrinvest added.

Nume Ekeghe and Juliet Akoje

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