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Financial Services
A look at how much Nigerian banks paid their staff in 9-month 2020
Thirteen Nigerian banks collectively spent a total of N413.49 billion on their staff between January and September 2020.
Thirteen Nigerian banks on the floor of the Nigerian Stock Exchange collectively spent a total of N413.49 billion on their staff between January and September 2020.
According to checks by Nairalytics – the research arm of Nairametrics, the N413.49 billion personnel cost represents a 6.36% increase compared to N388.77 billion spent in the corresponding period of 2019, despite the economic shocks caused by the Covid-19 pandemic this year.
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The personnel expenses encompass all of a company’s expenditure in relation to staff remuneration and welfare within a specific financial reporting period.
In other words, such expenses may include salaries/wages, other benefits like health insurance costs, pension, training, amongst others.
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FBN Holdings Plc
FBN Holdings Plc is a holding company for First Bank of Nigeria Ltd and other subsidiaries such as FBNQuest and FBN Merchant Bank, which means the figures represent personnel expenses for all the subsidiaries across the FBN Holdings group of companies.
- The bank paid a sum of N74.2 billion as personnel expenses in the review period, representing 16.9% of the N439.9 billion gross revenue generated in the same period.
- The premier bank posted an impressive performance in the year, growing its profit after tax by 31.7% from N51.7 billion recorded in 2019 9M to N68.16 billion in 2020.
- Staff cost incurred by First Bank Holdings increased by 7.2% compared to N69.2 billion spent in the comparable period of 2019, and 6.4% increase compared to N69.7 billion recorded in 2018.
- Checks by Nairalytics Research shows that FBN Holdings has a total of 9,016 employees as of December 2019.
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United Bank of Africa
- UBA paid a total of N66.6 billion to its workers in the review period, which represents 14.7% of the N453.7 billion generated as gross revenue.
- The tier one bank increased its staff expenses significantly by 20.7%, from N55.2 billion recorded in 2019 to N66.6 billion in 2020.
- UBA also recorded a 5.9% increase in gross revenue (N453.7 billion) and posted a profit after tax of N77.13 billion as at September 2020, representing a 5.5% decline compared to N81.63 billion recorded in the corresponding period of 2019.
- As of June 2020, UBA has a total employee of 11,200, 15.4% decrease when compared to 13,237 recorded as of December 2019.
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Zenith Bank
- Zenith recorded a 5% increase in staff expenses from N57.1 billion in 2019 to N59.9 billion in 2020, which represents 11.8% of the total gross revenue earned in the period.
- The most profitable bank on The Exchange grew its revenue by 3.6% from N491.3 billion in 2019 to N508.9 billion in the review period.
- In terms of profitability, Zenith Bank posted a profit after tax of N159.3 billion, representing 5.7% increase compared to N150.7 billion recorded in the comparable period of 2019.
- Zenith Bank increased its staff strength by 9% from 5,982 as of December 2019 to 6,521 by the end of June 2020.
READ: GTBank, Access Bank, 11 others pay workers N271.64 billion in H1 2020
Access Bank
- Access bank spent the sum of N57.1 billion as staff costs, 4.4% increase compared to N54.7 billion recorded in the previous year.
- It also recorded a 15.3% increase in gross revenue (N592.8 billion), while in terms of profitability, grew by 15.7% from N88.4 billion in 2019 to N102.3 billion as at September 2020.
- As of June 2020, Access Bank plc has a total staff strength of 5,576. This is 5% lower than 5,870 recorded as of the end of last year.
READ: Nigerian economy slips into recession as GDP contracts by 3.62% in Q3 2020
Stanbic IBTC
- The bank spent a total of N31.2 billion as personnel expenses in the 9-month period of 2020, 2.2% increase compared to N30.6 billion recorded in 2019, having also increased gross revenue by 15.3% to stand at N183.3 billion.
- Notably, Stanbic recorded an improved profit of N66.2 billion from N55.6 billion recorded in the same period of 2019.
- Stanbic IBTC also increased its number of staff between December 2019 and June 2020 from 2,936 to 3,004 respectively.
READ: Nigeria’s tier-1 banks pay N29.8 billion worth of taxes in Q1 2020
For a full list of the banks and their personnel expenses in 9-month 2020, see the table below. It also contains their personnel expense costs in the last four years for easy comparison.
Source: Nairalytics
What you need to know
- Of the thirteen banks under review, nine recorded positive increase in personnel expenses when compared to the corresponding period of 2019, while four recorded decline.
- The thirteen banks collectively posted a profit after tax of N678.2 billion between January and September 2020, 6.9% increase compared to the previous year (634.5 billion).
- According to data from the National Bureau of Statistics, the staff strength of Nigeria’s Deposit Money Banks grew by 1.5% from 94,498 in Q2 2020 to 95,888 as of Q3 2020. However, it declined by 5.5% compared to 103,610 recorded as of Q3 2019.
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Bottom line
Despite a very difficult year for the Nigerian economy, commercial banks maintained headcount and their payroll structure. This is perhaps due to the agreement reached between the central bank and the bankers committee in the wake of the planned downsizing at Access Bank.
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Standard Chartered Nigeria Plc crashes ‘personal loans’ interest rate to 1% monthly
The Bank crashed its interest rate to one of the lowest in Nigeria’s lending space.
Standard Chartered Nigeria Plc, has crashed its interest rate for ‘personal overdraft’ from 1.25% to 1% per month, according to information seen by Nairametrics.
Nairametrics understands that this review makes the rate, one of the lowest in Nigeria’s lending space, especially when compared to other players in the industry.
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This is a strategic move by the bank as it makes major inroads into Nigeria’s competitive but lucrative retail end of lending. The retail end which includes divisions such as personal loans, payday loans is highly competitive with Fintechs, and other banks all jostling for the same market.
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Despite efforts by some of the banks to restructure their loan books due to the adverse effect of the pandemic, banking sector credit to the private sector improved to N19 trillion in the third quarter of 2020 representing a 15.6% increase from 2019.
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Notably, according to a CBN survey on credit conditions as reported by Nairametrics, supply of secured and unsecured credits to households is expected to increase in the first quarter of 2021, having recorded an increase in the previous quarter (Q4 2020).
Meanwhile, a cursory review of lending data on the websites of some sampled financial institutions, revealed that some financial institutions retained or downwardly reviewed their monthly interest rate on payday loans. For example, GT Bank Quick credit crashed its rate from 1.75% to 1.33%.
READ: Over 1 million people took loans from banks below 20% interest rate in 1 year- CBN
Furthermore, UBA Click credit maintained its 1.58% charge, Zenith Bank term loan remained at 2.16%, Renmoney retained its 2.98% interest rate, and a host of others.
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What you should know:
- According to Standard Chartered, Personal Overdraft facility provided by Standard Chartered Plc is a revolving facility targeted at salaried customers with 12 months tenor and usually based on 50% of the net monthly salary of customers.
- A minimum salary qualification of N50,000 is specified.
