Employees in Commercial Banks in Nigeria earn much less than their counterparts in other African Countries.
This is according to a report from Emerging & Frontiers Capital (EFC), an independent equity research firm based in London.
The report indicates Nigerian banks have witnessed a major decline in salaries over the last decade, with Nigerian banks now compensating their staff at half the rate they did ten years ago, despite managing similar USD assets and striving to protect profitability.
The report, released on Friday, examined salary trends among “six “leading Tier 1 Nigerian banks, including Zenith Bank, GTCO, First Bank, Access Bank, UBA, and Stanbic IBTC.
According to the report seen by Naijaonpoint, the 6 Nigerian banks under review paid higher salaries per employee than their seven East African peers in 2014.
The East African NMB Bank and CRDB Bank (Tanzania), Bank of Kigali (Rwanda), KCB Group, Co-op Bank, Equity Group (Kenya), and SBU (Uganda) banks are included.
However, when compared to Nigeria, their salaries were reportedly 5x higher than their Nigerian counterparts.
A recent analysis from Naijaonpoint research indicates Nigerian banks respond in markedly different ways when it comes to employee pay.
Wema Bank appears to maintain the most junior-heavy structure, possibly due to a broader retail presence.
Zenith Bank strikes a hybrid model but still leans toward a large entry-level base.
The report also stated that whilst banks have increased their employees over the years, they pay staff less
It also stated that by its estimates, 66% of staff are now being paid USD19k or less, vs 36% in 2014.
Customer complaints have also surged during this period, hinting at the toll on service quality.
Despite the drop in salaries, the report acknowledges that Nigerian banks have implemented rigorous cost-management strategies over the years due to persistent economic challenges.
It also flagged the growing burden of regulatory costs, noting that Tier 1 banks paid $274 million in AMCON levies last year, about 31% of their total staff costs. The report warned that this could discourage credit expansion if left unchecked.
A key recommendation in the report suggests that removing the AMCON levy from banks that no longer require forbearance from the Central Bank of Nigeria (CBN) and have coverage ratios exceeding 100% could help Nigerian bankers earn higher salaries.
A key recommendation in the report suggests that removing the AMCON levy from banks that no longer require forbearance from the Central Bank of Nigeria (CBN) and have coverage ratios exceeding 100% could help Nigerian bankers earn higher salaries.