Nine Banks Report N2.99tn Operating Expenses on Inflation, Regulatory Charges

Kayode Tokede

On the bank of sustained inflation, Ecobank Transnational Incorporated (ETI), Zenith Bank Plc and seven other financial institutions operating in Nigeria and other Sub-Saharan Africa (SSA) countries declared N2.99 trillion operating expenses (OPEX) in the half year ended June 30, 2026.

Analysis of the banks audited/unaudited H1 2026 result and accounts showed that the N2.99 trillion OPEX is about 7.8 per cent increase over N2.78 trillion reported in H1 2025.

Despite the increase in OPEX, the banks posted N3.2 trillion profit before tax in H1 2026, about 19.2 per cent increase over N2.69 trillion reported in H 2025.

Inflation across SSA remained relatively contained during H1 2026 despite renewed global price pressures, supported by prudent monetary policy, easing food prices, and improving exchange rate stability in several economies.

While inflation accelerated in Ghana to 5.2 per cent and edged higher in Nigeria to 15.91per cent, reflecting lingering domestic cost pressures, Côte d’Ivoire maintained low inflation at 1.8 per cent, while Kenya (4.5 per cent) and Tanzania (4.0 per cent) continued to record moderate price growth.

Nigeria’s inflation remained on a broad disinflation path during H1 2026 despite a temporary uptick

driven by higher global energy prices following geopolitical tensions in the Middle East. Headline

inflation eased early in the year before rising to 15.93per cent in May and moderating slightly to 15.91per cent in June 2026.

In response, the Central Bank of Nigeria (CBN), adopted a cautious monetary policy stance, reducing the MPR from 26.50 per cent in February to 23 per cent at the last Monetary Policy Committee meeting (MPC) to contain inflationary pressures, preserve exchange rate stability, and anchor inflation expectations.

Further analysis of the banks’ results and accounts, showed that ETI, Zenith Bank and First HoldCo Plc declared the highest OPEX by value, while Jaiz Bank posted the highest by percentage difference.

As of H1 2026, ETI reported N856.5 billion OPEX, a 0.34 per cent increase from N853.65 billion reported in H1 2025.

Zenith Bank declared N633.76 billion OPEX, up by 9 per cent from N581.43 billion in H1 2025. On its part, First Holdco posted N608.09 billion OPEX, representing an increase of nearly 10 per cent from N552.83billion in H1 2025.

This was closely followed by GTCO that announced N277.39 billion OPEX in H1 2026, a growth of 7.3 per cent from N258.5billion in H1 2025.

GTCO in a presentation stated that its OPEX’s 7.3 per cent increase is with non-controllable costs accounting for 26.6% of total OPEX.

“The increase was driven largely by higher regulatory charges, depreciation and infrastructure-related costs, as well as continued investment in people and customer service. These pressures were partly mitigated by reductions across technology, marketing and other discretionary expense lines, reflecting continued focus on cost efficiency,” GTCO said in a presentation to analysts and investors

According to the lender, the key OPEX growth drivers was regulatory and statutory charges remained a significant component of the cost base, with AMCON expenses increasing 9.9% to N55.9billion and Deposit Insurance Premium rising 15per cent to N18.0billion.

“The increase reflects the scale of the group’s balance sheet and deposit franchise, with these costs largely determined by regulatory and statutory requirements. The group continued to absorb higher infrastructure-related costs, with Depreciation and Amortisation increasing 41.8per cent to N54.3billion, while Occupancy Costs and Repairs & Maintenance rose 10.2 per cent to N19.8billion. The movements reflect the continued build-out and maintenance of the Group’s physical and operating infrastructure.

“Investment in human capital and service delivery remained a priority, with Personnel Expenses rising 4.7per cent to N57.0billion and Customer Service Related Expenses increasing 98.3 per cent to N2.4billion. The increase in customer service costs reflects continued efforts to strengthen service capacity and customer experience.

“4.7per cent growth in Personnel expenses (N57.0 billion vs N54.4billion) resulted from the full weight impact of staff promotion and increases in salaries of Core and non-Core employees done to cushion the impact of rising cost of living for employees across the Group’s Banking and non-Banking entities,” GTCO added.

However, Jaiz Bank’s OPEX grew by 44.5 per cent to N26.6 billion in H1 2026 from N18.44 billion in H11 2025 to record the highest growth by proportion.

Analysts believe the hike in inflation rate, among others, contributed to the companies’ cost of sales and OPEX, stressing that its impact affected not only their robust profit generation, but dividend payout at the end of the year.

They predicted further hike in OPEX in 2026, stressing that its impact may cut down on earnings and dividend payout to shareholders.

Speaking, Vice President, Highcap Securities Limited, Mr. David Adnori said the hike in cost of sales and operating expenses is a reflection of global economic unrest, stressing that financial institutions operating in Nigeria and in Africa do not operate in isolation.

He expressed that the growth in cost of sales and operating expenses reported by listed companies would definitely have an impact on profit and dividend payout to shareholders.

He said, “The world is currently facing a high inflation rate and Nigeria, Africa at large are not exempted from this experience, with countries on the continent witnessing record high inflation rate. The surge in inflation rate is following the rally in crude oil prices, amidst the face-off between Russia-IUkraine and USA-Israel/ Iran, among other nations.”

“Reacting to the surging inflation rate, regulators of several countries where Nigerian companies operate have also raised their interest rates to curb the rising cost of goods and services. However, this is yet to yield any significant positive as the inflation rate above 30 per cent. With cost impacted, Nigerian companies may suffer slow profitability this year and it might impact on dividend payout,” he added.