COVID-19: 4 Banks report 74.7% increase in IT expenses to N51.63bn in 2020

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By Kayode Tokede

Amid COVID-19 lockdown, Zenith Bank Plc, among three other leading banks in the country reported N74.7 per cent increase in Information Technology (IT) and Electronic-businesses expenses to N51.63billion in 2020 as against N29.55billion reported in 2019.

The other three banks are Access Bank Plc, United Bank for Africa Plc (UBA) and Guaranty Trust Bank (GTBank) Plc.

These banks record higher amount spend on IT in 2020 due to forced work-from-home policies triggered by COVID-19.

Software application such as Zoom, and Microsoft Teams went mainstream during the pandemic as most businesses increasingly depended on them to function.

Our correspondent  gathered that  Zenith Bank , followed by Access Bank reported significant increase in their IT and E-business expenses in the year under review.

Specifically, Zenith Bank reported 107.6per cent increase in its IT expenses in 2020 to N20.44billion as against N9.85billion reported in 2019.

Our correspondent gathered that the bank’s expense line for 2020 reveals that it spent N148.1 billion on other expenses compared with N129. 4 billion in the same period of the previous year. IT also contributed to bank’s expense line, making up about 13.8per cent of total operating expenses.

While remote working may have been a major contributor, the bank likely splurged heavily on software applications, cloud computing, SaaS, and investing in technology to drive its FinTech goals.

Apart from IT, Zenith bank also spent more on Asset management Corporation (AMCON) levy during the year, incurring a cost of N30.9 billion in 2020 from N28.65billion in 2019.

Further breakdown revealed that Access Bank spends N18.74billion in IT and E-bossiness expenses in 2020 as against N9.77billion reported in 2019.

The other two banks, GTBank and UBA reported an increase of 49.9 per cent and about 10 per cent on IT expenses in 2020 respectively.

As GTBank’s IT expenses moved from N3.9billion in 2019 to N5.82billion in 2020, UBA reported N6.6billion IT expenses from N6.06billion in 2019.

Our correspondent can report that GTBank in 2020 reported a 12.6 per cent growth in Operating expenses from N131billion in 2019 to N147.4billion in 2020.

The lender stated that, “Depreciation and amortization which grew by 28 per cent as a result of incremental charge on capital spend on expanding IT infrastructure in Q4 2020 as well as capitalization of amount spent on Furniture & equipment, computer hardware and software procured for Branches in prior year.”