Mainstreet Bank Extends Olive Branch to Ex- Staff

13 Jan 2013

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MD Mainstreet, Faith Tuedor-Mathews

Festus Akanbi
Indications emerged that the ongoing transformation programme initiated by the management of Mainstreet Bank Limited 18 months ago has begun to yield the desired dividend even as the bank said it is committed to embarking on the implementation of an accommodative retirement package for its former employees sent packing in the course of the turnaround measure.

Fielding questions from THISDAY in Lagos at the weekend, Managing Director/Chief Executive of the bank, Faith Tuedor-Mathews said the management of the bank has put adequate structure in place to make the institution competitive in the emerging banking landscape in the country.

In the wake of the intervention of the Central Bank of Nigeria, Afribank Plc, Bank PHB Plc and Spring Bank Plc were bridged following their failure to secure prospective investors in 2011. The CBN had withdrawn their licences and in their positions emerged three bridged banks namely, Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited.

But giving an update on the ongoing negotiation with the two unions in the banking industry the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE) and the Association of Senior Staff of Banks Insurance and Financial Institutions (ASSBIFI) ,over the fate of the bank’s staff laid off in the course of the ongoing restructuring in the bank, Tuedor-Mathews said the tripartite meeting between the bank, labour and the federal ministry of labour is yielding fruits.

She disclosed that although the bank had spent about N1.3 billion on what she called payment of ex-gratia to the affected staff, the management of the bank has also been given the nod by the board to pay 25 percent of the entire gratuity of the staff to them, adding that the percentage is bound to go higher.

The Managing Director, Asset Management Corporation of Nigeria (AMCON)  Mustafa Chike-Obi had last year told THISDAY that the bridged banks were not under any obligation to pay staff inherited from their legacy institutions because the laws did not recognise them as part of the liability inherited by the bridged banks.

It was gathered that the purchase and assumption platform which defined the takeover of the assets of the legacy banks does not recognise staff liability as part of the responsibility of the new management. However, the bank’s chief said in its attempt to give a human face to the issue of staff rationalisation, the management has commissioned a committee to calculate the entire gratuity of the ex-staff and those still in the system but who were inherited from the legacy Afribank and the bank has resolved to pay 25%.

Other measures taken include the decision of the bank to write off staff share loans to the tune of N436 million, while some of them were allowed to go away with their status cars.

What was initially approved by the board was the payment of 25 percent of the total gratuity but the unions were said to have insisted on 50 percent. Tuedor-Mathews said the board is examining the new recommendation.

On the present state of the bank, the chief executive explained that a cocktail of measures put in place by the current management has put the bank on the path of profit making. The bank which was said to be incurring a N2.5 billion monthly losses as at August 2011 has moved to the threshold of N1.2 billion profit every month.

Tuedor-Mathews said the bank has moved from its loss position to profit making, saying a N15 billion profit margin is being targeted by the time the bank’s 2012 audited result is out.

She explained that the modernisation exercise being undertaken at the bank’s various branches is aimed at making the bank competitive, saying Mainstreet Bank has begun to reap from the modest investment made in human and technology areas of the bank in the past 18 months.

According to her, the bank is committed to ccreating a culture that enables it to deliver on its business principles-operational excellence, customer intimacy and product leadership.

She pointed out that the challenges that faced Mainstreet Bank in the past 18 months were peculiar given the long history of the bank.
She said what the new management did at inception was to focus on people, governance, processes, technology and performance.

Tuedor-Mathews said the bank is being put in a good position pending the determination of AMCON’s decision on the three bridged banks.

Tags: Business, Nigeria, Featured, MAINSTREET BANK

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