Nigerian Banks’ Operating Expenses Surge by 42.51% in 2023, Reaching N3.23tn

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Operating expenses of ten major Nigerian banks witnessed a significant increase of 42.51% in 2023, reaching N3.23 trillion compared to N2.26 trillion in the previous year, according to findings by The PUNCH.

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This data was derived from the annual financial results of these institutions submitted to the Nigerian Exchange Limited.

Access Holdings, FBN Holdings, Zenith Bank, United Bank for Africa, FCMB Group, Sterling Financial Holding, Fidelity Bank, Wema Bank, Stanbic IBTC, and Guaranty Trust Holding Company were among the financial institutions analyzed.

Operating expenses include various costs incurred during normal business operations, such as rent, equipment, inventory, marketing, personnel expenses, insurance, research and development, and depreciation.

The surge in operating expenses was primarily driven by increases in personnel costs and other operational expenses across the board.

AccessCorp, Nigeria’s largest bank, reported a 38.85% rise in operating expenses to N697.53 billion, attributed to higher personnel costs and IT-related expenses.

Similarly, FBN Holdings experienced a 46.83% increase, reaching N534.34 billion, while FCMB Group saw a 35.64% rise to N154.44 billion, mainly due to elevated personnel expenses.

Experts attribute this surge in operating expenses to factors such as inflationary pressure, naira devaluation, and upward salary reviews.

During a recent forum, Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., emphasized the importance of managing operating expenses effectively for banks to maintain profitability and competitiveness while delivering high-quality services to customers.

Olubunmi also projected an increase in non-performing loans for Nigerian Deposit Money Banks in 2024 due to the country’s economic slowdown, suggesting measures such as improving credit risk management and promoting economic stability to address these challenges.

Additionally, a 2023 report by KPMG Nigeria highlighted significant pay increases for bank employees following the removal of fuel subsidy by the Federal Government. Several banks, including Wema Bank PLC, GTCO, and Zenith Bank PLC, implemented salary raises and other initiatives to mitigate the impact on their staff.


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