Inflation outpaces salary rise in banks amid record earnings

… prices increase 12x, salaries only double

A review of the nine-month financials of listed Nigerian banks shows that between January and September 2024, 11 banks spent N1.08 trillion on wages and salaries, marking a 91 percent year-on-year growth from the N564.7 billion spent by these banks within the period in 2023.

However, in the first nine months of 2024, Nigeria’s inflation jumped from 29.90 percent to 32.70 percent, with the prices of goods increasing more than twelvefold since the beginning of the year. Essentially, the salary increases put into effect by these banks have not been sufficient enough to combat the surging cost of living of its employees.

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This is coming off the back of record earnings posted by Nigerian banks in nine months to 2024.

Access Holdings, the parent company of Access Bank incurred salaries cost of N268 billion during the nine months, marking a 140 percent year-on-year growth from the N111.8 billion incurred during the corresponding period in 2023. During the nine months, Access Holdings gross earnings appreciated by 114.5 percent year-on-year to N3.4 trillion, from N1.6 trillion as of 9M 2023.

The group’s net profit also appreciated by 83 percent year-on-year to N457.7 billion in 9M 2024, from N250.4 billion in 9M 2023.

For FBN Holdings, there was an 89 percent year-on-year increase in salaries and wages to N210.4 billion, from N111.2 billion as of 9M 2023. During the period, FBN Holdings’ net profit hit N533.9 billion, marking a 126 percent year-on-year growth from the N236.4 billion net profit posted in 9M 2023.

In the first nine months of 2024, UBA ranked as the second highest payer in wages and salaries, reporting a wage bill of N216 billion. This marks a 102% year-on-year increase from the N106.8 billion recorded during the same period in 2023. The bank’s net profit grew by 17 percent year-on-year to N525.3 billion during 9M 2024, from N449.3 billion as of 9M 2023.

Zenith Bank’s wage bill rose by 70% year-on-year to N150.7 billion in the first nine months of 2024, up from N88.4 billion in the same period of 2023. However, this increase was outpaced by a 91% year-on-year surge in the bank’s net profit, which reached N827.3 billion by the end of September 2024, compared to N434.2 billion in 2023.

GTCO Holdings, the highest profit maker in Nigeria was the tier-1 bank with the lowest wage bill in 9M 2024. The bank had a N68.8 billion wage bill in 9M 2024, representing an 89 percent year-on-year growth from the N36.3 billion recorded in 9M 2023. However, during the period under review, GTCO’s net profit grew by 195 percent year-on-year to hit N1.085 trillion, from N367.4 billion as of 9M 2023.

Stanbic IBTC Holdings’ staff costs hit N63.7 billion in 9M 2024, marking a 39 percent year-on-year growth from N46 billion as of 9M 2023. Even as the group’s net profit appreciated by 67 percent year-on-year to N182.9 billion, from N102.2 billion as of 9M 2023.

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Fidelity Bank’s wage bill appreciated by 42 percent year-on-year to N42.4 billion as of 9M 2024, from N29.9 billion as of 9M 2023. However, the growth in wage bill lagged behind its profit growth, as Fidelity’s nine months net profit was N224.6 billion, marking a 145 percent year-on-year growth from the N91.8 billion net profit posted in 9M 2023.

Wema Bank’s wage bill appreciated by 124 percent year-on-year in 9M 2024, to N30.5 billion, from N13.6 billion as of 9M 2023. The bank recorded a net profit of N52.7 billion in 9M 2024, representing a 174 percent year-on-year growth from N19.2 billion net profit posted in 9M 2023.

Sterling Holdco reported a 45% year-on-year increase in its wage bill for the first nine months of 2024, rising to N21 billion from N14.5 billion in the same period of 2023. Meanwhile, the group’s net profit surged by 66.5% year-on-year to N27.4 billion, compared to N16.5 billion recorded in 9M 2023.

The disparity or lag between the rate of salary increase and cumulative inflation has resulted in a decline in the real income and purchasing power of these banking employees.

This is even as consumer price index has jumped once again in October to 33.88 percent, marking the second consecutive increase after declining in July and August this year.