Cost of Living Crisis: 10 Banks’ Personnel Expenses Up 33% to N589.88bn 

Nume Ekeghe

Following salary increases in a bid to support staff to cushion the effect spiralling cost of living, 10 Nigerian banks spent a total of N589.88 billion as personnel expenses in nine months of 2023, representing an increase of 33.2 per cent over N442.97 billion reported in nine months of 2022. 

The DMBS are:  Access Holdings Plc, Zenith Bank Plc, United Bank for Africa Plc, Guaranty Trust Holding Plc (GTCO) and FBN Holdings Plc. 

Others include: Fidelity Bank Plc, Wema Bank Plc, Stanbic IBTC Holdings Plc, Sterling Financial Holdings Company Plc and Unity Bank Plc. 

Nigerian banks’ personnel expenses comprise wages and salaries, pension contributions, and other staff costs. 

In a bid to cushion the effect of fuel subsidy removal by the federal government in June 2023, most Nigerian DMBs increased their staff and contract staff remunerations.  

President Bola Tinubu’s administration announced reforms in fuel and foreign exchange in June, leading to a hike in the cost of living, most especially transportation and consumable goods across the country.

A few days after the President removed the fuel subsidy, the Nigerian National Petroleum Company Limited (NNPCL) announced a new price regime ranging from N537 to N600 per litre of petrol.

Inflation rate closed September 2023 at 26.72 per cent from 20.77 per cent reported by the National Bureau of Statistics (NBS) September 2022.  

THISDAY’s analysis of the banks’ nine months 2023 unaudited financial statements indicated that they all reported higher personnel costs compared with nine months 2022. 

Analysis of the top five DMBs showed that at N117.6 billion, the amount Access Holdings spent as personnel costs in nine months 2023 is 31 per cent higher than the N89.84 billion it reported for the preceding year. 

Also, Zenith Bank ’s personnel expenses increased to N88.43 billion in nine months of 2023 from N61.46 billion in nine months of 2022 while UBA declared N111.11billion personnel expenses in nine months of 2023, representing an increase of 38 per cent from N80.77billion reported in nine months of 2022. 

FBN Holdings declared N113.19billion in nine months of 2023, representing an increase of 33.3 per cent from N84.91billion in nine months of 2022 as GTCO’s personnel expenses rose to N37.58billion in nine months of 2023 from N30.54billion in the preceding year.

Wema Bank, Zenith Bank, UBA, GTCO, among others had declared salaries increase for both contract and regular staff across the country. According to a source, Fidelity Bank increased salaries of its staff.

However, feeling undervalued and overlooked, Fidelity Bank’s contract staff are voicing their frustration over the glaring disparity in compensation and the lack of growth opportunities within the organization. 

Zenith Bank had also announced an implementation of a company-wide salary increment for all its staff to address the prevailing economic challenges resulting from the removal of petrol subsidy.

In the same vein, the management of GTCO said it increased salaries of its junior and contract staff in line with rising inflation. The bank said the raise took effect from July 2023.

The chief executive officer, UBA, Oliver Alawuba in statement said the bank’s board of directors has announced the implementation of a cost of living adjustment for its staff effective immediately.

UBA said although it had previously implemented cost of living adjustment for staff on October 1, 2021 and more recently on April 1, 2023, the persistent economic challenges faced by employees and the broader society as a whole informed the unanimous decision to again implement another adjustment.

Wema Bank also announced a raise in the salaries of its workers to cushion the effect of petrol subsidy removal.

Wema Bank’s personnel expenses increased to N19.04billion in nine months 2023, a growth of 24.3 per cent from N15.32billion reported in nine months of 2022. 

The bank said the current economic realities, which had witnessed recent spikes in fuel, electricity, and other prices, required employers to prioritise the welfare of their workers.

“Wema Bank’s vision extends beyond its bottom line; with this salary increase for its staff, the bank expects the ripple effect of positive change to extend to the wider industry and world of work,” the bank’s Divisional Head, People, Brand & Culture, Ololade Ogungbenro said in a statement.

He added, “Wema Bank’s unwavering support for its employees lies at the heart of this expected transformation. The impact of this salary increase bears more than mere numbers on a pay slip, employees are experiencing a renewed sense of motivation and dedication to their roles, knowing that their hard work is genuinely recognised and rewarded.”