The banking sector has long been the toast of many Nigerian workers, mainly because people who work there are believed to earn quite a lot of money. While this may not be entirely true for every Nigerian banker, the truth remains that the sector is one of the best-paying in the country. In Q1 2020 alone, thirteen Nigerian banks collectively spent more than N178 billion as personnel expenses.
Focus on banks’ personnel costs in Q1 2020
According to checks by Nairametrics Research, thirteen banks listed on the Nigerian Stock Exchange (NSE) collectively spent N178 billion as personnel expenses during the first quarter of the year. This shows a 9.5% increase when compared to N162.6 billion which the thirteen banks recorded during the comparable period in Q1 2019.
It should be noted that personnel expenses encompass all of a company’s expenditures in relation to its staff’s remuneration and welfare, albeit within a specific financial reporting period. In other words, such expenses may include salaries/wages, other benefits including health insurance costs, pension, training, etc.
Comparing how much various banks paid their workers in Q1 2020
Ecobank Transnational Incorporated (ETI) recorded the biggest personnel expense in Q1 2020. As much as N43.3 billion was spent on workers across places like Nigeria, Togo, Ghana, and others where the Pan African bank operates.
FBN Holdings Plc came in second on the list, having spent N23.9 billion on employees’ salaries and other benefits. Now, as we have always specified for the sake of clarity, FBN Holdings Plc is a holding company for First Bank of Nigeria Ltd and other subsidiaries such as FBNQuest and FBN Merchant Bank. What this means, therefore, is that the figure above represents personnel expenses for all the subsidiaries across the FBN Holdings group of companies. Further checks by Narametrics Research revealed that FBN Holdings has a total of 9,016 employees as of December 2019.
Meanwhile, United Bank for Africa (UBA) Plc came in third. The tier-1 bank spent about N21.9 billion for its staff’s remuneration during the first three months of the year. UBA had about 13,237 employees, according to information gleaned from its full-year 2019 financial statement.
Access Bank Plc witnessed a significant increase in its personnel expenses from N12.8 billion in Q1 2019 to N19.6 billion in Q1 2020. This is partly due to the fact that its total number of employees jumped from 4,273 in FY 2018 to 6,898 as of December 2019. As you may well know, this increase followed the merger/acquisition of Diamond Bank which became effective in early 2019.
Also, Nigeria’s most profitable bank (Zenith Bank Plc) spent about N18.1 billion as personnel expenses in Q1 2020. Interestingly, this is slightly less than how much (N18.2 billion) the bank spent for the same purpose in Q1 2019. Note that the reduction is most likely due to the fact that the bank’s staff strength reduced from 6,253 as of December 2018 to 5,982 as of December 2019.
It is important to mention that Guaranty Trust Bank, which is Nigeria’s second most profitable bank, spent N9.2 billion for personnel remuneration in Q1 2020. The tier-1 bank is known for its very minimal operating cost approach. This probably explains why its staff strength as of December 2019 stood at 3,509.
For a full list of the banks and their personnel expenses in Q1 2020, see the table below. We have also provided their personnel expense costs ibn Q1 2019 for easy comparison.
It is uncertain, at this point, whether the COVID-19 pandemic would have any impact on how much bank workers would earn for the rest of the year. Recall that after the pandemic hit, Access Bank Plc was among the first to consider salary cuts and layoffs as a cost-cutting approach to cope with the negative effects of the pandemic. However, the Central Bank of Nigeria (CBN) had warned banks against laying off any staff, as Nairametrics reported.