H1’24: 7 Banks’ Personnel Expenses Rise By 90.2% To N374.73bn

Seven listed deposit money banks’ (DMBs’) personnel expenses surged by 90.25 per cent to N374.73 billion in the first half of this year, from the N196.97 billion reported for the corresponding period of 2023, findings by New Telegraph has shown.

The banks are Zenith Bank, FBN Holdings, Stanbic IBTC, First City Monument Bank (FCMB), Sterling Financial Holdings Company , Wema Bank and Jaiz Bank. Nigerian banks’ personnel expenses comprise wages and salaries, pension contributions, and other staff costs.

New Telegraph’s analysis of the seven lenders’ financial statements for the six month period ended 30 June, 2024, shows that at N134.197 billion, the amount that FBN Holdings spent as personnel costs in the first half of the year is N70.28 billion or 109.96 per cent higher than the N63.91 billion it reported for the corresponding period of 2023.

Similarly, Zenith Bank’s personnel expenses increased by N59.65 billion or 106.04 per cent to N115.90 billion in H1’2024 from N56.25 billion in the first half of last year. Also, Stanbic IBTC Holdings’ staff costs rose by N13.58 billion or 45.99 per cent to N43.09 billion in the first half of 2024 compared to N29.51 billion in the corresponding period of last year.

For FCMB, the second tier lender’s personnel expenses increased to N35.96 billion in H1’24 from N21.16 billion in the first half of 2023. Wema Bank’s personnel costs also increased significantly in the first half of this year, rising by N13.81 billion or 116.36 per cent to N25.68 billion from N11.87 billion in the corresponding period of last year.

Sterling Bank’s unaudited financial statements for H1’24 indicate that personnel expenses increased to N13.65 billion from N9.77 billion in the first half of last year. Non-interest bank, Jaiz Bank’s, unaudited financial results for the first half of 2024 equally show that personnel costs headed north, rising to N6.25 billion from N4.48 billion in the corresponding period of last year.

Analysts note that despite intensifying cost cutting measures, such as shutting unprofitable branches, adopting digital technology and laying- off staff, coupled with the rising number of their employees leaving the country for greener pastures abroad in the last few years, banks’ personnel expenses have surged in recent times.

For instance, available data from the National Bureau of Statistics( NBS) shows that the total staff strength of the country’s banks fell from 103,610 as of the end December 2019, to 93, 090 as of the end of December 2021.

Commenting on the decline in lenders’ staff strength in a report released in late 2021, analysts at CSL Research, said: “The decline in banking sector staff strength does not come as a surprise as the coronavirus outbreak in Nigeria led to many banks closing some of their branches across the country which may have led to some redundancies but more importantly the pandemic must have restricted expansion and new hiring.”