Spending on staff by Nigeria’s largest banks in the first nine months of 2017 hit N345.36 billion, up 5 percent when compared to the same period last year.
The 11 banks had total staff strength of 45,250 as at December 2016, resulting in an average cost per staff of N7.36 million.
This is based on summation of operating expenses of Nigeria’s 11 largest listed banks that released their results on the Nigerian Stock Exchange (NSE) for the third quarter ended September 2017.
The lenders are Zenith Bank Nigeria Plc, Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank (GTBank) Plc, Stanbic IBTC Holdings Plc, First Bank Plc, United Bank for Africa Plc, Union Bank Plc, Unity Bank Plc, and Wema Bank Plc
Other operating expenses were up 21 percent to N681.23 billion in September 2017 as against N536.42 billion as at September 2016 underlined by a high inflationary environment and continued impact of devaluation on the prices of goods and services
Banks also spent money on continuous investment in their channels, distribution network, service quality, and brand quality.
For some banks, regulatory induced costs such as the Mandatory Asset Management Corporation (AMCON) charge contributed to the rise in other operating expenses.
Drilling down the figures shows GTBank, the largest lender by market capitalization, had staff cost increased by 13.12 percent to N24.62 billion in the period under review while other operating expenses rose by 8 percent to N65.73 billion. Cost to income ratio (CIR) increased to 37.59 percent in September 2017 from 37.49 percent as at September 2016.
However, Zenith Bank’s staff cost fell by 2.32 percent to N53.74 billion in the period under review while other operating expenses rose by 30.17 percent to N117.62 billion.
Access Bank’s staff costs increased by 21percent to N43.50 billion while other operating expenses spiked by 35.44 percent to N111.05 billion due to adjustment to employee compensation. CIR increased by 5.1 percent basis point year on year (y/y) to 64.30 percent.
UBA’s staff costs increased by 10.05 percent to N51.26 billion in the period under review while other operating expenses rose by 37.43 percent to N94.40 billion.
First Bank Holdings’ other operating expenses were up 21 percent to N73.03 billion as at June 2017.
Banks in Africa’s most populous nation and largest oil producer have been operating in a volatile and tough operating environment as they spend huge sums on diesel oil to power generating plants at head office and branches since electricity from the grid is erratic.
The devaluation of the currency as a result of the adoption of a flexible exchange rate by the central bank in June 2016 and the liberalization of the foreign exchange market have contributed to increased operating expenses.
The National Bureau of Statistics reported last week that Nigeria’s inflation rate rose 16.01 percent for the month of August 2017; lower the central bank’s 6 percent and 9 percent target range.
BALA AUGIE
