…Stanbic, UBA, others emerge top-paying banks
Soaring inflation and new hires have doubled banks’ wages and salaries in just over a year, putting pressure on their operating costs.
According to data tracked by BusinessDay, wage and salaries incurred by 10 banking groups in the first half of 2024 (H1 2024) stood at N615.8 billion, representing a 96 percent growth from the N314.4 billion incurred in H1 2023. The banking groups are: Access Holdings, UBA, FBN Holdings (First Bank), GTCO (GT Bank), Zenith Bank, Stanbic IBTC Holdings (Stanbic), Wema Bank, FCMB Group, Sterling Holding Company (Sterling), and Jaiz Bank.
Access Holdings incurred the highest wage bill among the banks, with N151.5 billion, up by 145 percent from the N61.9 billion reported in H1 2023. First Bank’s personnel expenses for H1 2024 hit N134.2 billion, marking a 110 percent year-on-year increase from the N63.9 billion personnel expenses incurred in H1 2023.
UBA’s wage bill grew by 92 percent year-on-year to N126.6 billion during the six months, up from N65.9 billion as of H1 2023. Zenith Bank’s wage bill also increased by 64 percent year-on-year to N63.5 billion, from N38.6 billion in H1 2023. Stanbic incurred wage expenses of N40.6 billion during the six-month period, up from N28.2 billion in H1 2023.
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GT Bank’s wage bill almost doubled, increasing by 98 percent year-on-year to N39.3 billion, up from N19.9 billion in H1 2023. FCMB Group’s wage bill grew by 74 percent to N26.6 billion in H1 2024, up from N15.2 billion reported in the corresponding period of 2023.
Similarly, Wema Bank’s wage also went up by 77 percent to N15.6 billion, from N8.8 billion in H1 2023. Sterling Bank’s wage bill also jumped by 41 percent year-on-year to N12.5 billion, from N8.9 billion as of H1 2023.
Jaiz Bank’s wage bill went up by 78 percent to N5.5 billion, from N3.1 billion in H1 2023.
For some of these banks, data reviewed by BusinessDay show that the increase in employees also contributed to their rising wage bills, albeit, marginally. Zenith Bank, for example, increased its employee count by 511 to 8,146 between H1 2023 and H1 2024. UBA’s employee count between H1 2023 and H1 2024 increased marginally by 3 percemnt or 338, from 9,751 to 10,089.
With inflationary pressures hitting hard on individuals and businesses, companies have been forced to substantially increase their staff wages. For banks, apart from their staff wages, they have also had to incur increased outsourcing costs. Outsourcing costs relate to expenses incurred when a bank hires third-party contract staff.
GT Bank’s outsourcing costs increased by 69 percent year-on-year to N14.5 billion during the half-year, in contrast with N8.6 billion in H1 2023. First Bank’s outsourcing costs increased by almost 300 percent year-on-year during the half-year to N16.4 billion, from N4.3 billion in H1 2023. Wema Bank also witnessed a dramatic increase in its outsourcing costs, posting N8.85 billion for the category in H1 2024, representing a 272 percent year-on-year growth from N2.38 billion as of H1 2023.
The jump in labour costs for banks has positioned some of them as the top-paying employers in the country. For example, in H1 2024, Stanbic IBTC Holdings posted a wage per employee of N2.11 million per month. Zenith Bank had a wage per employee of about N650, 000 per month, a stark comparison with UBA’s N2.09 million per month. However, UBA’s foreign operations employ about 4,150 staff members.
Ike Ibeabuchi, an emerging markets analyst, attributed new bank hiring to quest for expansion, noting that “wage rises have become a sensible thing to do due to high inflation and naira devaluation.”
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