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EXCLUSIVE: 10 Nigerian Banks Saved N12.38bn On Travel, Entertainment In 2020

EXCLUSIVE: 10 Nigerian Banks Saved N12.38bn On Travel, Entertainment In 2020

The travel restrictions introduced in Nigeria and other countries at the peak of COVID-19 to reduce the spread of the disease helped 10 Deposit Money Banks (DMB) save over N12.38 billion in travel, hotel and entertainment expenses in 2020.

This is because the restrictions in domestic and internationals travel made organisers of many business-related seminars and conferences, which required travel, to hold them on online communications platforms such as Zoom, Google Meet and Microsoft Teams.

BizWatch Nigeria‘s analyses of the 2020 audited financial reports of 10 banks showed that their business travel expenses slumped by 38 per cent year-on-year from a total of N32.74 billion in 2019 to N20.32 billion in 2020.

Some of the banks assessed are Zenith Bank Plc, First City Monument Bank (FCMB), Access Bank Plc, Guaranty Trust Bank Plc (GTB), United Bank for Africa Plc (UBA), Stanbic IBTC Bank Plc and First Bank of Nigeria Limited (FBN).

Others are Fidelity Bank Plc, Unity Bank Plc, and Wema Bank Plc.

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Access Bank saved N3.35billion, the highest amount, on business travel and entertainment in 2020, reporting N7.15 billion travel expenses, a 32 per cent reduction from N10.5 billion business travel expenses in the corresponding period of 2019.

Throughout last year, UBA spent N4.94 billion on business travel, representing 28 per cent decrease compared with N7.06 billion expended within the same period in 2019.

With N1.88 billion business travel expenses, Zenith Bank reported a 32 per cent slump in its business travel spending in 2020 as against N2.75 billion spent  in 2019.

Business travel expenses by GTB reduced by 61 per cent from N725.55 million in 2019  to N286.31 million in 2020.

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First Bank’s business travel expenses closed year 2020 with N3.51 million, a 48 per cent decrease over N6.78 billion spent in 2019.

FCMB’s spending on business travel also declined by 56 per cent to N597 million in 2020 as against N1.37 billion in 2019.

Stanbic IBTC incurred N676 million business travel expenses in 2020, indicating a 61  per cent decline  as against N1.73 billion expended in 2019.

With N328 million reported in 2019, Unity Bank’s business travel expenses declined by 40 per cent year-on-year to N197 million in 2020.

Fidelity Bank spent N964 million on business travel in 2020, an decline of 15 per cent from N1.76bn spent in 2019.

Wema Bank spent N163 million on business travel in 2020, representing 55 per cent decline as against N360 million spent in 2019.

GTB in its financial report confirmed that the bank “consciously reduce our business travels through the use of Zoom and Microsoft Team for meetings, timely shut down of our branches to reduce electricity or fuel usage, development of electronic approval process for memo to reduce paper usage, among others.”

This reduced business travel spending by not only banks but across all other sectors led to low passenger turnout for African airlines last year as carriers like Kenya Airways trimmed its business trips to Asia, Europe and North America to the barest minimum.

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When the pandemic started, many countries shut their borders and airlines cancelled flights. In 2020, air traffic decreased by 89 per cent and profits across the airlines dropped by $2 billion, according to the International Air Transport Association (IATA).

Following the resumption of business activities fully this year due to the reduction in the number of confirmed cases of coronavirus and ongoing vaccination, travelling from one country to another has resumed.

However, analysts believe that business travel will return to pre-pandemic level more slowly than leisure travel.

Microsoft co-founder, Bill Gates, last year predicted a 50 per cent decline in business travel.

“My prediction would be that over 50 per cent of business travel and over 30 per cent of days in the office will go away,” Gates said during the New York Times’ Dealbook conference.

About Author

Ife Ogunfuwa is an award-winning reporter who is versed in reporting business and economy, technology, gadgets reviews, telecoms, tax, and business policy review, among others. She loves telling stories behind the numbers. She has professional certifications in business and financial reporting. You can reach her via – [email protected]

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