Nigerian banks have been affected by the economic situation in the country as a result of the stringent monetary policies put in place by the Central Bank of Nigeria (CBN). In order to cut costs and reduce financial loss in 2016, Nigerian banks have been on a retrenchment spree since the start of the year.

On Wednesday, Ecobank Nigeria Limited laid off 1040 staff, cutting across all cadres of its staff from Junior to top management positions as a result of poor profitability over harsh economic situations. This number is lower than the original 1,400 staff penned down for disengagement.

About a week ago, it was reported that Diamond Bank Plc. laid off 200 staff, two months after the bank announced that its profit before tax for the first quarter of this year fell to N6.04bn, from the N7.94bn which it recorded in the first quarter of 2015.

“Diamond Bank recently right sized its workforce. The rightsizing was a core strategic exercise in line with the bank’s growth objective and the will to continue the drive to optimise cost and enhance value for the shareholders at the end of the business year,” a statement from Diamond bank read after the downsizing.

About a month ago, FBN Holdings, the parent company of First Bank of Nigeria Limited, announced a gradual reduction in the number of its workers by 1,000 in order to reduce its costs. This came after the group posted an over 80 percent decline in its profit for the 2015 financial year.

Following the outcome of the Central Bank’s Monetary Policy Committee meeting, where it was voted that the country will be adopting a flexible exchange rate regime and allow the Naira float freely, several investors have sold their stock in the financial services due to uncertainties on what policies the CBN will put next. In light of this, Nigeria’s banking share index plunged 8.5 percent on Wednesday, the main share index fell 2.7 percent to 26,925 points, declining for a second-day, dragged down mostly by a sell-off in banking stocks. The All Share Index closed down 4.26 percent, its biggest daily drop in 16-months. The index was dragged down by Zenith Bank and Guaranty Trust Bank, which fell 9.68 percent each, Diamond Bank dropped by 9.38 percent and First City Group fell 9.36 percent. Other banks whose share index declined include Access Bank, down 8.47 percent, Fidelity Bank, 6.77 percent, FBN Holdings down 5.06 percent and Ecobank Transnational Inc. by 4.72 percent.

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