Commercial banks in Nigeria spent N799.8 billion on staff salaries in 2023, a 44.3% increase from the previous year’s N554.2 billion, despite only a 5.1% increase in staff strength to 56,226 employees.
The banks’ personnel expenses totalled N919.1 billion, with 87% allocated to salaries and the remaining 13% to other benefits such as pensions, reflecting the industry’s recognition of the importance of competitive salaries to attract and retain top talent.
The ten banks analyzed posted a combined net profit of N3.15 trillion in 2023, more than triple the previous year’s N1.04 trillion, highlighting the sector’s profitability and the essential role of high-performing staff in driving innovation and maintaining customer satisfaction.
Commercial banks spent a total of N799.8 billion on staff salaries in 2023, representing a 44.3% increase when compared to the N554.2 billion spent in the previous year.
This is as the banks collectively increased their staff strength marginally by 5.1% to 56,226.
This is according to an analysis by Nairalytics, the research arm of Nairametrics.
According to the data, which was culled from the audited results of the banks, the ten banks incurred N919.1 billion as personnel expenses, an increase of 46.6% compared to N627.1 billion in the previous year.
This means that the banks allocated an average of 87% of their personnel expenses to staff salaries, leaving the remaining 13% to other employee benefits, such as pension contribution plans.
The Nigerian banking industry is one of the major drivers of the local economy and is perceived as one of the most profitable sectors.
Notably, the ten banks under consideration posted a combined net profit of N3.15 trillion in the review year, more than triple the N1.04 trillion recorded in the preceding year.
Given the competitive nature of the Nigerian banking industry, attracting and retaining top talent is essential. Therefore, offering competitive salaries is a key strategy for banks to differentiate themselves and secure the best employees.
High-performing staff are crucial for maintaining bank profitability, driving innovation, and ensuring customer satisfaction. Hence, the significant increase in salaries reflects the industry’s recognition of the value of its workforce in sustaining growth and competitiveness.
Recall that banks announced staff salary increases across the board in 2023 ranging from 25% to 50%, on the back of high inflationary pressure emanating from the removal of the petrol subsidy.
Nairalytics analysed banks’ salaries per staff for the 2023 financial year. This is calculated by dividing total salary expenses by staff strength, giving an indicative annual average salary per staff for the year.
Below is an analysis of highest highest-paying banks based on salary per staff:
#5: FBN Holdings – N15.49 million
FBN Holdings, the group company of First Bank saw its personnel cost jump by 52.6% year-on-year in 2023 to N179.1 billion, compared to N117.4 billion in 2022. From this total, 76% (N135.9 billion) was spent on wages and salaries, while the rest was spread across pension contributions, post-employment and other staff benefits.
In terms of staff strength, the firm increased its number of employees by 10% to 8,771, indicating an annual average salary per staff of N15.49 million in 2023. Compared to the previous year’s N12.24 million, it increased by 26.6%.
Salary categorization shows that most of the employees fell into the bracket of higher earners, as 83.6% of the staff received salaries within the range of N5.5 million and above, while almost half of the staff received salaries above N9 million for the year.
#4: Fidelity Bank – salary average is N16.41 million
Fidelity Bank spent 96% of its personnel expenses on wages and salaries, which gulped about N50.3 billion, representing an increase of 92.7% compared to N26.1 billion recorded in the preceding year.
A breakdown of the bank’s staff cost shows that N1.82 billion was spent as the end of a year bonus, while N555 million was allocated to pension contributions.
Similarly, the number of employees increased slightly by 0.8% to 3,063. Hence, salary per staff surged by 91.2% to N16.41 million as against the N8.58 million recorded in 2022.
Further analysis reveals interesting insights as 44% of the employees belonged in the highest categories based on salary structure, earning above N10 million annually.
#3: UBA – salary average N17.35 million
UBA increased its personnel expenses by 60.4% year over year to N182.8 billion in 2023 compared to N113.9 billion recorded in the previous year.
Meanwhile, N173.6 billion was spent on wages and salaries, accounting for 95% of the total employee cost.
In addition, the number of employees increased by 4.3% to 10,007, which makes the group the highest employer of labour compared to the other banks. This may be attributed to its spread across several other countries within and outside Africa.
Considering the salaries and staff strength, salary per staff stood at 17.35 million on average for 2023, surpassing the previous year by 55.5%.
The compensation breakdown shows that 27% of the employees earned between N300,000 and N2 million annually.
Also, 22% received within the range of N4 million to N5.5 million in 2023, while about 19% of the workforce received above N9 million in the review year.
#2: Stanbic IBTC – salary average is N20.45 million
Stanbic IBTC incurred N65.76 billion as personnel expenses in the review year, a 29% increase from the N50.99 billion recorded in the previous year.
Staff salaries accounted for 95% of the total personnel cost, gulping a total of N62.49 billion, while the remaining was spent on cash settlement to staff linked with equity transactions.
Meanwhile, staff strength increased marginally by 1.6% to 3,056 from 3,008 people. As a result, salary per staff rose by 25.1% to N20.45 million compared to N16.35 million in 2022.
The salary breakdown as presented by the firm, shows limited salary categories between N1 million and 6 million. However, 75% of the employees received over N6 million annual salary.
#1: Access Holdings – Salary average is N21.85 million
Access Holdings Plc, the parent company of Access Bank recorded N167.9 billion as personnel expenses in 2023, a remarkable increase from the N116.6 billion incurred in the previous year.
A further breakdown shows that N160.25 billion was spent on wages and salaries, while others were allocated to pension contributions and restricted share performance plans.
The Group also increased its employee force from 6,824 in 2022 to 7,334. This brings the average salary per staff for the year to N21.85 million, in contrast to N15.48 million in the previous year.
Despite the remarkable increase, which placed the firm as the highest salary-paying bank based on average, a significant proportion of the employees earned between N4 million and N18 million, accounting for about 73% of the workforce, which indicates a rather symmetric distribution where most of the employees earned in the middle classification.
