In September 2024, Guaranty Trust Bank (GTBank) discreetly raised salaries for all 3,300 of its employees by 40%, marking a strategic response to Nigeria’s harsh economic realities and heightened competition within the financial sector. This increase was unannounced beforehand, catching many employees by surprise, including assistant banking officers (ABOs) now earning ₦720,000 ($442) monthly.
The adjustment follows a trend in the banking sector, where companies like Zenith Bank, UBA, and Wema Bank have raised salaries to mitigate the economic fallout from the removal of fuel subsidies, currency devaluation, and rising inflation, which now stands at approximately 30%. This economic squeeze has slashed the naira’s value by nearly 70%, prompting businesses to rethink employee compensation to retain talent
GTBank, known for its lean operations and low cost-to-income ratio (₦0.29 spent for every ₦1 earned in 2023), remains Nigeria’s most cost-efficient Tier-1 bank despite the raise. The new salary structure will bring personnel costs to ₦63.1 billion ($38.7 million), still below other major banks’ expenditures. Even with the increase, the bank’s efficiency ratio will slightly rise to only ₦0.30 per ₦1 revenue, maintaining its reputation as a highly profitable institution
This is not GTBank’s first tactical salary revision. In 2022, the bank doubled the pay of its technology staff to curb employee attrition when many left for higher-paying roles in rival institutions and abroad. A tech employee in the same ABO grade currently earns roughly ₦1 million ($613) monthly, showcasing the bank’s focus on incentivizing key roles. The latest raise departs from industry norms by applying across all staff, including branch-level employees, breaking away from the common practice of focusing only on head office teams
GTBank’s strategy also reflects the need to ward off poaching, a concern in a competitive labor market where other financial institutions actively scout experienced professionals. This industry-wide trend aims to retain talent and address inflation-related hardships, ensuring employee well-being amidst Nigeria’s challenging economic landscape
GTBank’s salary hike signals that Nigerian banks are increasingly prioritizing staff welfare while balancing operational costs. This move could influence other Tier-1 banks to adjust their compensation policies to remain competitive.