Nigerian Banks’ Personnel Costs Soar to N589.88 Billion Amidst Rising Living Expenses

Changes in the economic landscape following fuel subsidy removal and escalating living costs have bolstered Nigerian banks’ personnel expenses by N589.88 billion in the first nine months of 2023.

This figure represents a 33.2% increase from the N442.97 billion reported during the same period in 2022.

The banks at the forefront of this financial phenomenon include Access Holdings Plc, Zenith Bank Plc, United Bank for Africa Plc, Guaranty Trust Holding Plc (GTCO), and FBN Holdings Plc.

Others joining this expenditure trend are Fidelity Bank Plc, Wema Bank Plc, Stanbic IBTC Holdings Plc, Sterling Financial Holdings Company Plc, and Unity Bank Plc.

The surge in personnel costs stems from a strategic decision by these financial institutions to support their staff amidst the economic turbulence triggered by the federal government’s removal of the fuel subsidy in June 2023.

This move, announced by President Bola Tinubu’s administration, contributed to a surge in living expenses, particularly affecting transportation and consumable goods nationwide.

Analysis of the nine-month 2023 unaudited financial statements of these banks reveals a unanimous effort to prioritize staff welfare.

Access Holdings led the charge, allocating N117.6 billion, a 31% increase from the preceding year.

Similarly, Zenith Bank’s personnel expenses rose to N88.43 billion, UBA reported N111.11 billion, FBN Holdings declared N113.19 billion, and GTCO’s personnel expenses increased to N37.58 billion.

This surge in personnel expenses is not isolated; several banks, including Wema Bank, Fidelity Bank, and UBA, implemented salary increases to counterbalance the economic strain caused by the subsidy removal.

While acknowledging the inflationary pressures, these institutions view this investment in their workforce as a means to foster a positive transformation in the industry and work environment.