•Why Many Customers No Longer Go To Banks Again
Have you noticed that most people no longer like to go to their banks to transact business any longer? City People can authoritatively reveal that most bank customers these days have stopped going to their banks for so many reasons. One is because of the long queues they witness at the banks across Nigeria. So bad as the situation become, that most banks have been erecting Tents and Chairs for their customers to sit and wait to be attended to. They are also given Tally numbers to help make the Queues orderly. Depending on the bank you go to and the time you join the Queue you can be the queue for 2 hours and you can be given numbers like 75 or 85.
The other problem is paucity of Cash. Many of the banks don’t always have enough cash to pay the customers. There have been examples of how many of the banks have been so cash strapped that they have to wait for customers who bring in cash, to enable them pay other customers who have come to withdraw.
So bad has the situation become that one of the banks was so cash strapped that in a day, it paid out dirty & filthy N200 notes. There is a growing concern in the banking sector about the effect Covid-19 has had on at least 10 major commercial banks, as customers decry unsavory experience on their respective social media handles, while concerned banks seem helpless.
City People gathered that some of the banks are already finding it difficult to operate despite the life-saving emergency fund injected into them by the CBN, the apex bank, as most of the banks are gasping for breath to meet up with account holders’ demand.
While the Money Market indices remained complex for the common customers to see the retrogressive financial status of the banks, the banking activities reveal that all is not well with the banks. It is to be able to cope that the banks have introduced a Shift System, wherby branches rotate their opening and even staff also rotate their coming to work. In most of the states, especially Lagos, if Branch A opens this week, it will not open next week, allowing for a kind of rotation system. Also, many of the bank staff run weekly shifts.
There is a bank that has been accused by unsatisfied customers who took to Twitter to complain about the unnecessary delay that is being experienced in the bank nowadays.
Most of the banks have erected tents where customers wait almost eternally, to get into the bank, as they struggle to get numbered tags that allow them entry into the banking hall one after the other.
The banks do not usually have enough cash to disburse for customers who are in for withdrawals. In some of these banks, the queue will continue to extend until there are enough customers who are coming to make cash deposits.
It is the deposits collected that cash would be disbursed for those who have come for withdrawals. This means the efficiency of the cashier to disburse cash for demanding customers is a function of cash deposits received.
The ATM Machine is another challenge that proves the banks are troubled. City People discovered that four out of every ATM Gallery with 5 dispensing units, only two will be active, while customers jostle to withdraw cash as the 2 units may also develop server problems without notice. The bank with white and blue signature only runs its ATM between 8am and 8pm. ATM servers go down automatically at the tick of 8pm.
This is the major reason why most bankers find solace in POS centres for transfers and withdrawals despite the high transaction charge.
While the ATM charges N65.00 after every four withdrawals, the POS charges N150 for withdrawal or deposit of N5,000.00 and charge N300,00 for a transaction up to N10,000
Speaking with a POS agent, it was discovered that the banks are behind the operations of the POS centers. The machine is credited with N500,000.00 on a daily basis with an expected discount between 3% and 7%. The POS has since served as an alternative for those who may not want to remain in the ATM queue for long and for uncertainty.
A source from one of the banks with the flashy red logo hints that the bank relies on deposits from some other states in order to meet the demand in Lagos branches. Industry sources linked the current development to the overbearing reforms in the industry, adding that, the CBN had not made up its mind on what to do with the banks.
Dr. Segun Odenuga, a top financial analyst, while speaking to City added that the apex banks’ policies were suffocating the banks, adding that the banks were finding it difficult to cope with the issues surrounding their future. “The CBN policies, no matter how well-intended, are not helping the banks.
An Orange logo bank’s aggressive cost-cutting strategy also failed to defend profit in the second quarter. The bank recorded the first drop in profit in many years at the end of half-year operations in June 2020. Cost-cutting has been the management’s response to the inability to improve revenue since 2017. It isn’t working for the bank this year.
The bank’s audited accounts for the half-year in June 2020 show that management could not contain operating expenses during the period. Operating cost grew by 19 percent year-on-year – the highest growth record for the bank since the beginning of the current decade.
Also, loan impairment charges went out of control and multiplied three times year-on-year. This is the highest increase in loan loss expenses for the bank in four years, after massive cut downs for two years to 2018 and a flat position in 2019.
This is the manifestation of the signals of a change in pattern for the bank as observed at the end of the first quarter – that the bank was shifting from growing profit ahead of non-growing revenue to losing profit per naira of gross income. This is a reflection of weakening the ability to keep cutting costs in the face of persisting revenue weakness.