A hangover of the 2014 liquidity crisis in the banking sector, which saw profit margins shrinking by as much as 85% in the next reporting period at some leading banks, continues to haunt bank employees who live in fear of losing their jobs. Their fears are not unfounded since 274 of their colleagues were booted out in the 2014/15 financial year, according to the latest Banking Supervision Annual Report released in August. BoB Governor Linah Mohohlo observes in the report, which covers the 10 local commercial banks and three statutory banks that the loss of jobs was due to restructuring exercises, voluntary exit and retirement undertaken to reduce costs and increase operational efficiencies.
Whither bankers' union?
Fears of job losses are aggravated by allegations of inactivity of the bankers' trade union - the Botswana Bank Employees Union (BOBEU) – which has led to management in some banks having a field day; sources have told The Patriot on Sunday. The sources, who are members of the union, said ever since the new central committee was elected into office salary negotiations have been reduced to a formality with management pushing their offers without resistance, as has always been the case. The biggest problem is that the central committee is deeply divided along factional lines, which compromises negotiations as the leadership of the union fails to reach a consensus and therefore fails to present a clear position of their demand, it is alleged. In turn, management in banks has more often than not implemented granted staff annual increments without any bargaining taking place. "We have never, in the history of this union, heard of negotiations being concluded in a day or two as it happens with the current leadership. That is too short a period for the parties to have considered proposals and bargained effectively to reach a common ground," said a source, adding that the union leadership has been intimidated into submission in some banks where they are employed.
But the union Secretary General Lebogang Keabetswe dismisses as lies or a misunderstanding, suggestions that they are failing to represent their members effectively due to internal fighting. She denied divisions in the executive, and explained that they actively negotiated improved packages for their members during the 2014/15 retrenchments. Keabetswe said while salary negotiations are continuing at Capital bank, Bank of Baroda and Bank Gaborone they have long concluded negotiations with the major banks including FNBB, Barclays, Stanbic and Standard Chartered Bank. "People have grown accustomed to negotiations dragging on until around November when they get back-pays. What they fail to realise is that at that time their purchasing power would have been eroded throughout the year dragging them into debts. We have learned that such delays were usually caused by unreasonable demands made by our predecessors, and have resolved to correct that. Hence, the quick turnaround time and speedy conclusion of negotiations," explained Keabetswe, citing their lawsuit with FNBB which cost BOBEU half a million Pula as a learning curve. Court ruled that an employer can pay non-unionised staff if negotiations drag on, a decision which led to disgruntled members resigning from the union.
Union leaders, management close
To demonstrate inactivity of BOBEU, sources said the union has failed to hold an elective congress in May when the term of the current central committee elapsed, as stipulated in the constitution. The current leadership is therefore, remaining in office illegally because their two-year term has elapsed, sources said. The committee is also accused of colluding with management. An example is given about the sponsorship by Barclays Bank of the May 2014 congress in Selebi Phikwe, after which the leadership of the union watched helplessly as the bank retrenched 45 employees in 2015, after closing down three branches to cut operational costs. Sources blame the job losses partly on outsourcing of the Contact Centre and Collections Department by the bank. Keabetswe said the constitution gives the executive committee powers to postpone congress to a later date, which they did to allow for time to conclude some projects. She said a memo has been sent out to members informing them about the congress which will be held on October 13-16. She confirmed the Barclays sponsorship – saying it was not the only bank supporting them – but explained that it is normal for any trade union to be assisted by the employer to carry out their activities, which even happens in the public service. "Even this year we have secured sponsorship from our partners for the congress," she said.
BOBEU leadership is further accused of bungling 2015/16 salary negotiations at Bank Gaborone (BG). Salary negotiations stalled at Bank Gaborone after management refused to move from their offer of 4 % salary adjustment at the start of negotiations in February. BOBEU's initial proposal was 11% but later lowered to 9 % and further to 7 per cent, while BG never moved position on their offer. In February mediation between the parties failed and they were referred back to negotiations, which failed again on May 13. Bank Gaborone is alleged to have threatened to retrench some employees in the near future should the union refuse to accept the 4% on offer. Last year Bank Gaborone embarked on a restructuring exercise, which resulted in the closure of 10 of its Automated Teller Machines (ATMs). "That is wrong. Those allegations refer to negotiations of the previous year, which continued into 2016 because we started late after we only got permission to organise at Bank Gaborone in April," said Keabetswe.
Bank Gaborone Limited, currently led by Managing Director Sybrand Coetzee, is a relatively new bank in the Botswana market. It is a wholly owned subsidiary of Capricorn Investment Holdings (Botswana) (Pty) Ltd, in which CIH holds a 95.5%interest and is the first green field operation in the history of the diversified CIH group of companies. On the 1st of February 2006, Bank of Botswana issued a license to Bank Gaborone Limited to commence with its full retail banking business and the first branch was opened in September 2006. The bank now has six branches.
2015 job losses
A tight liquidity environment in 2014 put most banks under pressure to downsize staff to cut costs. Due to the liquidity crisis, profit margins dropped drastically to an all-time low in 2015 across the banking sector. The latest Banking Supervision Annual Report shows that in the 2014/15 financial year no less than 274 employees in the banking sector lost their jobs. Among all banks, Standard Chartered released the highest number by reducing its staff to 815 after retrenching 144 employees in 2015 during the implementation of a refreshed retail client strategy.
• Barclays Bank retrenched 45 in 2015, retaining 1 196 employees.
• Bank Gaborone retained 253, releasing 32 employees.
• Stanbic Bank Botswana retrenched 12, keeping 575 employees
• Capital Bank retrenched 32 and retained 95.
• National Development Bank (NDB) retrenched 9 and kept 177
Bucking the trend of retrenchments
• First National Bank Botswana (FNBB) increased staff to 1 222 after hiring 82 employees
• Banc ABC group, increased employees to 268 after adding 14 new recruits.
• Botswana Savings Bank (BSB) added 11 to reach 156 employees.
• Botswana Building Society (BBS) was unchanged at 202 employees
• Bank of India, State Bank of India Botswana and Bank of Baroda employ a total of 71 employees after minor additions.