Nigeria’s tier one banks christened by Nairametrics as FUGAZ (FBN Holdings, UBA Plc, GT Bank, Access Bank and Zenith Bank ) have spent a total of N19.5 billion as travel expenses for the 9 month period ended September 2017. The banks had spent N14.2 billion in the corresponding period of the prior year, indicating an increase of 37% or N5.4 billion.
In a year where inflation rate has been dropping and exchange rate stabilized, investors hoping to see a cut down of operating expenses of some of our biggest bank could be disappointed. Bankers were apparently busy traveling locally and around the world to close deals, seek for deposits, raise loans etc. It’s important to add too that banks have also posted record profits this year and could somewhat justify this spend.
At N19.5 billion, the FUGAZ have by far the largest travel budget of any corporate in Nigeria. For operators of private jets, travel agencies, airlines, growth in the banking sector is crucial to their revenues. This analysis, provides a cursory look at the banks with the largest travel spend in Nigeria.
Zenith bank is the biggest spender
Zenith Bank had the biggest provision for travel expenses as the bank spent N5.1 billion as travel expenses for the 9 months ended September 2017. This represents a whooping 177% increase from the N1.8 billion spent this time last year. In fact, travel expenses was a total of N2.9 billion for the whole of 2016. What caused this? We couldn’t find any major reason from its 9 months report. However, we did observe it spent an average of bout N1.5 billion per quarter this year. At this rate, Zenith Bank my spend an unprecedented N6.5 billion on travel and hotel this year.
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GT Bank has the smallest travel expense
GT Bank’s famed cost efficiency is also present in its travel expenses as it spent a total of N545 million for the 9 months ended September 2017, a increase of 46% from the N372 million it spent in the corresponding period of 2016. Nothing much to say here except that, how do these guys survive on such low budgets?
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FBNH still big spenders
Considering the size of their operations, it is not surprising that they rank as one of the biggest spenders. Being a holding company, FBNH travel expenses cater for all their subsidiaries, including First Bank, FBN Capital, FBN Insurance etc. These are all top-heavy subsidiaries and will typically incur huge travel expenses. At N3.4 billion travel expenses is just 8% higher than the N3.4 billion spent this time last year. It’s probably on track to beat last year’s spending and will surely cross N4 billion.
UBA recorded huge spike
United Bank for Africa is another behemoth of a bank with over 12,000 employees, it’s no surprise that they also have a large travel budget. At, N4.8 billion this year, travel spend rose 40%, from the N3.4 billion spent last year. UBA is on track to spend above N5 billion this year
Access Bank still tops
They have always topped the chart as heavy spenders when it comes to travel expenses. A reason for this is mostly attributed to the private jets, which the bank owns. Nevertheless, a travel budget of N5.4 billion is not one to mess around with. Most airlines, local and foreign, court Access Bank for their travel budget and it is understood that their top executives fly nothing but first class. At N5.6 billion, Access Bank travel budget is already 10% of its 9 months profits.