Nigerian banks got the most from their employees in 2020, on the back of adopting new technologies.
Ripples Nigeria analysis of financial statements of eight commercial banks actively trading on the Nigeria Stock Exchange (NSE) showed a 12.47 percent increase in profit per employee last year, despite work disruption brought about by the coronavirus pandemic.
Profit per employee, is a metric used to understand how much profit each of your employees brings in over the course of a given period.
Theoretically, the higher your profit per employee, the more efficient your company.
In arriving at the figure, Ripples Nigeria calculated the banks’ combined Profit after Tax (PAT) to thier total number of employees.
The banks reviewed for analysis are Zenith Bank Plc, FBN Holdings, United Bank for Africa Plc (UBA), Guaranty Trust Bank Plc, First City Monument Bank, Access Bank, Fidelity Bank and Union Bank.
The total PAT of the surveyed banks was N817.68 billion in 2020 an increase from N738.30 billion in 2019.
When the figure is computed from the total number of employees, it showed banks had a more efficient 2020, than it did in 2019.
In 2020, Profit Per employee was N128.6 million compared to N114.4 million in 2019, when the banks operated optimally and more staff.
Recall that on Saturday, Ripples Nigeria had exclusively reported how the combined workforce of these banks reduced by 7.31 percent from 51,350 in 2019 to 47,596 last year.
By ranking, GTB was the most efficient of all the banks surveyed as each employee generated an average of N38.78 million compared to N35.1 million the previous year.
GTbank’s profit for 2020, was N201.4 billion despite reducing its workforce by 7.4 percent.
Zenith Bank came second, as its profit per employee also increased by 8.3 percent to N30.5 million from N28.20 million the previous year. The banks profit of N230.5 billion is also the biggest among the lenders.
Access Bank is in third position as each of the bank’s 6,781 employees generated an average of N15.6 million compared to N13.6 million per 6,898 employees in 2019.
Read also: Eight Banks sacked 3,754 staff in 2020
Access bank’s PAT for the year was put at N106 billion a significant rise from N94 billion in 2019 with more employees.
FBN Holdings also saw a 31.6 percent increase in its profit per employee. N10.7 million in 2020 was generated by each employee as against N8.1 million in 2019.
The bank also shed 7.4 per cent of its workforce within the period, yet grew its total profit to N89.73 billion from N73.66 billion the previous year.
UBA posted profit per employee of N10.4 million in 2020, is a 55.9 percent rise from N6.7 million in 2019. To achieve this UBA sacked 18.1 percent of its staff, the highest drop of staff number of all the banks reviewed.
The bank made a profit of N113.7 billion compared to N89 billion the previous year.
Fidelity bank N9.4 million profit per employee in 2020 put the bank in sixth position among the banks surveyed.
Fidelity is one of the two banks that added to its workforce in 2020 from the previous year.
The bank in 2020 increased its staff strength by 0.40 percent.
Despite the increase in its headcount, the bank recorded a decline in profit from N28.4 billion in 2019 to N26.6 billion last year.
Union bank cane next with N7.1 million profits per employee in 2020, but this was a drop of 5.54 percent from N8.4 million each employee brought into the bank in 2019.
FCMB generated the lowest profit per employee of N5.4 million among the surveyed banks in 2020. Although, this is a significant increase from N4.4 million level in 2019.
During the year, FCMB sacked 7.2 percent of its staff, yet grew its total profit for the year to N19.6 billion from N17.33 billion in 2019.
From the 2020 figures it is clear, lenders are becoming more reliant in technology to boost their profits and this could spell bad news for bank workers.
Banking job has been described as one of the most unsecured job in the country, and it looks likely to get worst.
Banks are increasing investments in their digital platforms, gradually moving away from the ‘brick and mortar’ model of banking.
Take for instance; GTbank in two years has spent N71.52 million on software purchase.
And the figures obtained from the bank’s financials showed a consistent rise.
From N14.52 million in 2018, it increased to N26.6 million the next year and N30.2 million the following year.
By David Ibemere…
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