THE annual reduction in the staff count of the Nigerian banking sector did not feed into lower personnel expenses in the first half (H1) of 2020.
According to the research arm of a Lagos based stock broking firm, CSL Research, for eight coverage banks, total personnel expenses grew by 7.6per cent year on year (y/y) to N227.5billion in H1 2020 from N211.4billion in H1 2019.
The firm in a report released on Friday attributed the increase mainly to double digit growth in UBA (up 19.9 per cent y/y) and Access Bank’s 16 per cent rise in personnel costs.
“In particular, Access Bank concluded an acquisition which may have impacted H1 2020 personnel costs. For UBA, we reckon that the bank implemented an upward pay review in Q4 2019, thus the low base of H1 2019 was responsible to steep y/y rise in personnel cost,” the report read in part.
It should be recalled that the National Bureau of Statistics (NBS) published the data on key banking sector statistics last week. According to the report, the total staff strength of the banking sector declined by 9.5 per cent y/y and 2.6 per cent q/q to 94,498 persons which represents a 9-quarter low.
As at Q2 2020, it stated, the total number of banks’ staff decreased by -2.55per cent quarter on quarter (QoQ) from 96,975 in Q1 2020 to 94,498.
The number of staff in the sector which used to be the greatest employer of labour was
103,610 as at December 2019. With 9,112 job-loss in 6 months, representing approximately 50 jobs per day since December 2019, the banking sector seem to be shading a lot of manual staff weight.
The biggest y/y declines were recorded in contract staff (down 15.8 per cent y/y to 38,942), junior staff (down 5.6per cent y/y to 37,733) and senior staff (down 1.8per cent y/y to 17,619).
On the other hand, executive staff increased by 14.6per cent y/y to 204. On a q/q basis, all categories except senior staff declined with contract staff (down 5.4per cent q/q) leading while executive staff (down 1.9per cent q/q) and junior staff (down 0.8per cent q/q) followed. Senior staff increased by 0.3per cent q/q.
The decline in banking sector staff strength does not come as a surprise as the coronavirus outbreak in Nigeria led to many banks closing some of their branches across the country which may have led to some redundancies but more importantly the pandemic must have restricted expansion and new hiring.
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