Access, GTB, Zenith, 7 other leading banks spend N3.2 trillion to operate in Nigeria

The collective operating expenditures of 10 Nigerian banks surged by 42.51%, reaching N3.23 trillion in 2023 from N2.26 trillion in the preceding year.

These figures were derived from the annual reports submitted by the financial institutions to the Nigerian Exchange Limited.

The scrutinized financial institutions encompassed 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.

Legit.ng earlier reported that factors such as inflation and regulatory charges contributed to a 26% increase in the operating expenses of the banks, reaching N1.19 trillion in the first half of 2023.

According to information from Investopedia, an authoritative online resource for investment education, an operating expense refers to the costs a business typically accrues during its regular operations.

These expenses encompass a variety of items such as rent, equipment, inventory expenditures, marketing, staff salaries, insurance, step costs, funds designated for research and development, as well as depreciation and amortization.

In 2023, the primary factors contributing to the escalation in the operating expenses of the lenders were personnel costs alongside other operational expenditures.

Breakdown of banks' operating expenses

During the reviewed period, AccessCorp, Nigeria's largest bank, witnessed a 38.85% surge in operating expenses, soaring to N697.53 billion from N502.36 billion in 2022.

Holdco attributed this increase to a 43.97% rise in personnel costs, climbing to N167.90 billion from N116.62 billion, driven by heightened wages and salaries.

Other operating expenses increased to N465.67 billion from N341.32 billion, primarily due to elevated IT and e-business expenditures, totalling N78.05 billion.

Furthermore, a 30.49% increase to N68.81 billion in the Asset Management Corporation of Nigeria surcharge paid by the group in the previous year also contributed to the rise in its operating costs.

AccessCorp reported depreciation and amortization costs of N63.96 billion.