Banks’ travel expenses jump 163% on petrol, flight costs

Ten of Nigeria’s largest commercial banks incurred travel and accommodation expenses totaling N98.2 billion in the first nine months of 2024. This represents a 163 percent year-on-year growth from the N37.3 billion incurred in the corresponding period in 2023.

This comes as banks prepare for additional travel costs tied to year-end activities, including corporate parties, strategy meetings, and other specialised operations.

These banks which are publicly listed include: FBN Holdings, UBA, Access Holdings, GTCO Holdings, Zenith Bank, FCMB Group, Fidelity Bank, Jaiz Bank, Sterling Bank, and Stanbic IBTC Holdings. According to data tracked by BusinessDay, Access Holdings incurred the largest travel expense during 9M 2024, with N37.2 billion, which was 191 percent more than the N12.8 billion incurred in 9M 2023.

Amid rising inflation, with transport costs surging by 27 percent year-on-year as of September 2024, the increase in business travel expenses comes as little surprise. Data from the National Bureau of Statistics reveals a 57.8 percent year-on-year rise in airfares during the same period, reflecting the preferred mode of travel for banks.

After Access Holdings, UBA’s travel expenses hit N19.1 billion, reflecting a 223 percent year-on-year growth from the N5.9 billion expenses recorded in 9M 2023. The increase in travel expenses for UBA and Access Holdings is tied to their extensive operations across Africa. The depreciation of the Naira has further inflated travel costs for their subsidiaries operating within the continent.

FBN Holdings posted a travel expense of N17.7 billion during the period, reflecting a 143 percent year-on-year growth from the N7.3 billion posted in 9M 2023. Zenith Bank also posted N9.5 billion travel expenses during the period under review, marking a 131 percent year-on-year growth from the N4.1 billion recorded in 9M 2023.

Read also: Travel costs of six banks up 138% on rising fares

Fidelity Bank’s travel expenses surged threefold year-on-year, reaching N4.6 billion in the first nine months of 2024, compared to N1.5 billion during the same period in 2023. It was followed by Stanbic IBTC Holdings which recorded a travel expense of N3.1 billion in 9M 2024, up by 77 percent year-on-year from the corresponding period in 2023.

FCMB Group’s travel expenses appreciated by 58 percent year-on-year to N2.8 billion in 9M 2024, from N1.8 billion as of 9M 2023. GTCO Holdings, posted a travel expense of N2.6 billion during the nine months, marking a 104 percent year-on-year growth from N1.3 billion as of the same period last year.

Sterling Bank recorded a travel expense of N1.5 billion during the nine months, an 80 percent growth from the N822 million recorded in 9M 2023. Jaiz Bank also recorded a travel expense of N216 million.

Apart from the macroeconomic factors that fit into the context of rising travel expenses for banks, Nigerian banks have been more visible on the international scene in 2024. Fidelity Bank finalized its expansion into the UK in the last quarter of 2023, with the consolidation efforts in 2024 driving an increase in travel activity among its top executives.

Access Holdings also consolidated its expansion moves through the completed acquisition of banks in Uganda, Kenya, Zambia, Angola, and Sierra Leone. These moves have also contributed to the travel volume of the bank in 2024. Corporate events, along with multilateral and bilateral meetings, have also contributed to the rise in travel expenses, as banks play a pivotal role in Nigeria’s representation at international engagements.

This year, banks have been integral to Nigeria’s delegation at several high-profile international events, including the IMF/World Bank Spring Meetings in April, the IMF/World Bank Annual Meetings, and the Nigerian government’s visit to France.