Sterling Bank, a Nigerian tier-two commercial bank with a ₦174.76 billion market capitalization, has implemented a salary increase for its 3,000+ employees to mitigate the impact of increased living costs and inflation. This approximately 7% adjustment was internally communicated via memo in early January 2025. 

This decision aligns with a broader trend among Nigerian banks to reassess employee compensation in light of economic pressures affecting consumer spending. In August 2024, Sterling Bank had already introduced a cost-of-living adjustment (COLA) stipend, providing ₦75,000 to employees ranging from executive trainees to assistant banking officers. It remains uncertain whether this stipend will persist alongside the newly adjusted salary structure.

While specific figures have not been publicly disclosed, three sources indicated that the adjustments are determined by employees’ grade levels. Sterling employs a salary banding system, with increases typically falling between 7% and 10%. Recent adjustments have elevated many employees to the upper limits of their respective bands. For example, executive trainees (ETs), who previously earned ₦327,000 monthly, will now receive ₦351,000. Senior executives in junior roles above ETs, who were earning ₦500,000, will see their salaries increase to ₦527,000.

To facilitate pay increases without promoting employees to higher ranks, Sterling Bank utilizes a tiered salary structure that incorporates internal “notches” within each grade level, enabling raises without formal promotions, according to sources familiar with the bank’s compensation practices.

“Instead of moving employees up a grade during an economic downturn, companies may shift them to the higher band within their current grade,” said Chibuzo Ihentuge-Eric, an HR professional. “It’s a sideways adjustment that reflects market conditions.”

Sterling Bank has not provided a response to requests for comments.

Some employees expressed disappointment following the recent salary increase, as they had anticipated a more substantial raise comparable to the 20-30% increments offered by other banks. “Given the current inflation and economic conditions, this increase feels inadequate,” remarked one employee who wished to remain anonymous.

In late 2024, Union Bank implemented a 40% salary hike, with GTBank also announcing a similar increase. These adjustments are primarily aimed at retaining talent in an industry characterized by high turnover rates and aggressive recruitment practices. Studies indicate that offering competitive salaries is essential for minimizing employee turnover in Nigeria’s banking sector.

For the period ending September 2024, Sterling Bank reported a profit after tax of ₦27.4 billion, reflecting a year-on-year increase of 67.07%. The bank anticipates gross earnings of ₦121.8 billion for the first quarter of 2025.

In September 2024, Sterling Bank’s personnel costs reached ₦22.6 billion, constituting 21.67% of its total operating expenses of ₦104.3 billion. A projected 10% increase in personnel expenses due to recent salary revisions would elevate the bank’s wage bill to approximately ₦24.86 billion.

However, Sterling Bank’s personnel costs remain comparatively low relative to its competitors. For instance, Union Bank reported personnel expenses of ₦34 billion, Fidelity Bank ₦43.6 billion, and FCMB ₦56.5 billion.