-‘Unrealistic’ targets affect morale

The Graphic Business research team looks at the effects of the high expectations from management on new and existing staff of some of the banks in the country YOUNG and enthusiastic employees, mostly graduates from some of the nation’s numerous universities have found it tough coping with life working as a banker in the country, Graphic Business has learnt.

In a research, which was mostly interview based, some of the new recruits, and existing ones complained bitterly about the “unrealistic targets” set by management for them to meet, in order to remain in employment. However, most of the staff interviewed spoke to Graphic Business on condition of anonymity for fear of losing their jobs.

“After the necessary training, you are thrown into the deep end, basically. It doesn’t matter your level of knowledge of banking, you are given a very high target to meet, failing which you may find yourself out of job the next day”, a banker with one of the foreign owned banks in the country told Graphic Business. In fact, those who appeared seriously “disillusioned” about their work were the credit officers and “executives” who are at the forefront of deposit mobilisation for the banks.

The credit officers especially complained about how they are held personally responsible for bad loans that they had initiated.

“The practice [of holding credit officers personally liable for bad loans] is quite bizarre to an extent. As a credit officer, I can only recommend a client to the bank. I will open a file for the client who is in need of the loan or any other credit facility and do the assessment. After that, the credit report is submitted to my line manger who will then forward it to the credit committee for assessment, as to whether the advance should be approved or not. In fact, the risk management team will also do their own assessment by working on the file provided before the individual receives the credit. Yet, when the credit goes bad, that is if there is a default, you are held personally liable for the default. I have colleagues who have been on suspension because of this, some without pay until the client starts making payments”, a credit officer with one of the banks told Graphic Business.

According to him, “morale is so low that some of my colleagues have considered quitting their jobs several times but because the job market is too tight, they have not been able to do so”.

The level of frustration was not different among those leading the charge for more deposits. Deposits represents a very cheap source of finance for the banks, as a result of which with the general downturn in credit availability, most of the banks have invested heavily in human capital, mostly with the aim of using them to attract more customers to the bank, and therefore mobilise more cash. The problem is that those who are put in charge of this area of the bank’s operations are under real pressure, Graphic Business has uncovered. Especially, with regards to those working on premier banking products, which is an initiative by the banks to attract high net-worth individuals, sometimes it is more than just “ordinary business with some of the clients you meet”.

“It is very troubling sometimes. The high net -worth individuals are highly confident people and sometimes they want more than just doing business with the bank. Some would not like to open a premium account just because they want to do business with the bank. They seem to think that the pretty face in front of them can provide more than just banking services. When some of the new recruits are under so much pressure, we know that they end up in all sorts of problems with these individuals. The pressure is too much and the banks must ease the pressure on some of us”, another employee working within the premier banking unit of one of the banks told Graphic Business.

Credit history and multiple loan applicants

Investigations by Graphic Business also revealed that some criminals are actually making life seriously unbearable for some of the banks in the country. What most of these people do is that they use fictitious documents to secure loans from the banks, making it extremely difficult for some credit officers to operate efficiently. Even when the documents are genuine, the same document is often used to secure loans from other banks because of the lack of adequate credit history on applicants. The disjointed nature of credit files on individuals means that banks are not able to share information on loan applicants to determine whether they have the means to repay back such loans.

“This [lack of credit reference bureau] is a major problem in the country. The passage of the credit reference bill was expected to make things easier, but unfortunately progress has been far less encouraging”, an analyst at Databank Financial Services told Graphic Business.

An effective credit reference bureau is able to keep records on the credit history of all individuals. This makes it easier for the banks to manage delinquency because the ability of even the most liquid borrower to repay back a loan could be hampered if such an individual has taken several loans from other banks.

“At present you can borrow from Barclays and move to Zenith Bank for example to borrow as well. People have several loans in the system, and not even guarantees from employers have helped to ease this problem”, a credit manager told Graphic Business. Competitive drive in the sector Over the past five years, the banking industry in Ghana has undergone tremendous transformation. The introduction of the universal banking licence, and the foray of foreign banks, especially the Nigerian owned banks into the country have increased competition in the sector. The aggressive deposit mobilisation strategies in particular have forced most of the other “traditional” banks to respond. In fact, this has come at a heavy cost to some of the banks. In fact, records indicate that some of the banks, like Barclays Bank have witnessed reduced earnings in recent years because of the aggressive branch opening strategies to respond to the competition. Some of the managers of the banks believe strongly that it is the competition that has made the banks more aggressive, and therefore the high performance target is not an attempt to put undue pressure on anyone.

“As a manager, I am equally under pressure. In fact, the very existence of this bank is threatened by the competition. So, it is only a case of all of us working hard to stay ahead. It is true that some staff complain about their jobs, but it is the same everywhere, if you speak to people from the other sectors as well. I am also of the view that if people feel so much pressured, no matter how much you pay them, they will leave. I am more than happy to say that from our records, we do not have that high staff turnover to suggest that we are enslaving people so they are leaving. It is high ethics and rewarding emoluments that work in life”, a human resource manager with one of the banks explained to Graphic Business.