Employees in Commercial Banks in Nigeria earn much less than their counterparts in other African Countries.
This is according to a report from Emerging & Frontiers Capital (EFC), an independent equity research firm based in London.
The report indicates Nigerian banks have witnessed a major decline in salaries over the last decade, with Nigerian banks now compensating their staff at half the rate they did ten years ago, despite managing similar USD assets and striving to protect profitability.
The report, released on Friday, examined salary trends among “six “leading Tier 1 Nigerian banks, including Zenith Bank, GTCO, First Bank, Access Bank, UBA, and Stanbic IBTC.
What the report is saying
According to the report seen by Nairametrics, the 6 Nigerian banks under review paid higher salaries per employee than their seven East African peers in 2014.
The East African NMB Bank and CRDB Bank (Tanzania), Bank of Kigali (Rwanda), KCB Group, Co-op Bank, Equity Group (Kenya), and SBU (Uganda) banks are included.
However, when compared to Nigeria, their salaries were reportedly 5x higher than their Nigerian counterparts.
- “These salaries and wages per employee were 4.9 times higher at Stanbic IBTC, 3.6 times higher at Access Bank, and 3.4 times higher at Zenith Bank than those at Equity Group in 2014. However, in 2024, only one of the top three paying banks in 2014, Access Bank, continues to offer higher salaries and wages per employee than Equity Group.”
A recent analysis from Nairametrics research indicates Nigerian banks respond in markedly different ways when it comes to employee pay.
- The report indicates Stanbic IBTC emerged as the top-paying bank, with 76.5% of its employees earning above N6 million per annum, the highest among all banks reviewed.
- It’s closely followed by Access Bank (70.5%) and Fidelity Bank (65.3%). The report also showed that Stanbic IBTC, Access Bank, and Fidelity Bank are top-heavy in their compensation structure, suggesting a focus on elite, professionalized talent.
- GTCO and UBA offer the most balanced staff compensation, rewarding their operational backbone.
Wema Bank appears to maintain the most junior-heavy structure, possibly due to a broader retail presence.
Zenith Bank strikes a hybrid model but still leans toward a large entry-level base.
Banks pay staff less for more
The report also stated that whilst banks have increased their employees over the years, they pay staff less
- “Not only have bankers’ pay fallen dramatically in USD, but we also believe that our Nigerian Tier 1 banks are paying more people less. Based on the salary bands published by the banks in their annual reports, we estimate that the total number of bankers being paid USD19k or less per year has doubled over the past 10 years (from 14,955 in 2014 to 30,498). “
It also stated that by its estimates, 66% of staff are now being paid USD19k or less, vs 36% in 2014.
- The report also noted that staff are managing nearly the same level of assets but earning much less.
- Average assets per employee fell just 17% in the last decade, while staff costs relative to assets dropped by 54%.
Customer complaints have also surged during this period, hinting at the toll on service quality.
EFC recommendation
Despite the drop in salaries, the report acknowledges that Nigerian banks have implemented rigorous cost-management strategies over the years due to persistent economic challenges.
- “With an unorthodox monetary policy in place for much of the period, coupled with extremely high cash reserve ratios (CRRs) and a brutally expensive AMCON levy, most Tier 1 banks have focused on reducing operating costs while using their windfall profits to clear their back books,” the report explains.
It also flagged the growing burden of regulatory costs, noting that Tier 1 banks paid $274 million in AMCON levies last year, about 31% of their total staff costs. The report warned that this could discourage credit expansion if left unchecked.
A key recommendation in the report suggests that removing the AMCON levy from banks that no longer require forbearance from the Central Bank of Nigeria (CBN) and have coverage ratios exceeding 100% could help Nigerian bankers earn higher salaries.
- “We believe a possible solution to paying Nigerian bankers more, so that they can be encouraged to be transformational agents for the economy, is to remove the AMCON levy from the banks that no longer have forbearance from the CBN and have a coverage ratio of over 100%. Last year, Tier 1 banks in Nigeria paid USD274mn of AMCON levies, which represented 31% of their collective staff costs (USD891mn). This cannot continue into perpetuity, as it disincentivizes credit growth.”
Most firms here do not pay their staff properly, and I often wonder how they determine salary structures. Banks make billions in profit yearly, yet when I look at what they call ‘take-home pay,’ I shake my head. Let’s not blame AMCON and other levies—don’t do that. These banks report massive profits at year-end. Once, I was asked, ‘What do you need money for? You are too young to earn that much. You people are greedy.’ The problem is not just AMCON but a gap in regulation. People handling and overseeing billions yearly should earn enough to keep temptation far from their hearts