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Five midsized banks’ staff salaries rise 42% in one year

Five midsized banks’ staff salaries rise 42% in one year

The total salaries of five midsized Nigerian banks rose by 42.4 percent within a year, BusinessDay analysis of data from their financial statements shows.

The combined personal expenses of Fidelity Bank, FCMB Group, Sterling Financial Holding Company, Stanbic IBTC and Wema Bank rose to N219.9 billion last year from N154.4 billion in 2022.

The personnel expenses encompass all of a company’s expenditures with staff remuneration and welfare within a specific financial reporting period which include salaries/wages and other benefits like health insurance costs, pensions, and training, amongst others.

The Federal Government reforms, such as the removal of petrol subsidy and naira devaluation, implemented in the second quarter of 2023 increased the cost of living for cash-strapped consumers.

According to the National Bureau of Statistics, the country’s inflation rate rose to a record high of 31.70 percent in February from 29.90 percent in the previous month.

The removal of the fuel subsidy tripled the petrol price to N617 from N184, causing public transportation providers such as buses, tricycles and motorcycles to raise transportation fares.

This situation affected those who rely on public transportation, particularly workers in the private sector.

With higher transportation fares, many employees are forced to allocate a substantial portion of their salaries to cover commuting expenses, leaving little for other essential needs like food and rent.

This move made some banks re-evaluate their employee benefits by increasing salaries and wages. Some of the banks were Wema, Zenith, GTCO, UBA and Union Bank.

Analysis of individual banks

Fidelity Bank

Fidelity Bank’s personnel cost increased by 78.1 percent to N52.9 billion in 2023 from N29.7 billion in 2022.

The bank’s net interest income grew to N277.8 billion from N152.7 billion.

It recorded a 58.8 percent increase in its operating expenses while after-tax profit increased to N101.2 billion from a profit of N46.7 billion.

FCMB Group

FCMB Group’s personnel cost increased by 44.4 percent to N51.4 billion in 2023 from N35.6 billion in 2022.

The Group’s net interest income grew to N177.4 billion from N121.9 billion. It recorded a 41.6 percent increase in its operating expenses while its after-tax profit increased to N95.5 billion from a profit of N31.1 billion.

Sterling Financial Holdings Company

The holding company’s personnel cost grew 36.4 percent to N23.5 billion in 2023 from N16.9 billion in 2022.

Net Interest income increased to N90.3 billion from N76.4 billion. The bank also recorded a 14.5 percent increase in operating expenses. After-tax profit increased to N21.5 billion from a profit of N19.3 billion in 2022.

Stanbic IBTC Holdings

Stanbic IBTC Holdings’ personnel cost grew by 29.3 percent to N65.8 billion in 2023 from N50.9 billion in 2022.

Net interest income increased to N175.2 billion from N113.1 billion in 2022. It also recorded a 29.4 percent increase in operating expenses. After-tax profit increased to N140.6 billion from a profit of N80.7 billion in 2022.

Wema Bank

Wema Bank’s personnel cost increased by 25.4 percent to N26.7 billion in 2023 from N21.3 billion in 2022.

Net Interest income increased to N83.1 billion from N54.2 billion in 2022. It recorded a 35.9 percent increase in operating expenses. After-tax profit increased to N23.4 billion from a profit of N11.4 billion.