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Fidelity, Wema lead midsize banks in account maintenance fee growth

Fidelity, Wema lead midsize banks in account maintenance fee growth

Fidelity Bank Plc, Wema Bank Plc and FCMB Group Plc are the listed midsize Nigerian banks with the highest growth in account maintenance fees last year, data compiled by BusinessDay shows.

In the banks’ latest financial statement, Fidelity Bank recorded a 68.8 percent increase in account maintenance fees, followed by Wema Bank with 43.6 percent and FCMB Group with 26.9 percent.

Stanbic IBTC Holdings and Sterling Financial Holdings Company had 24.2 percent and 18.7 percent respectively.

Further analysis of the statement shows that the banks’ total value of account maintenance fees rose by 36 percent to N32.8 billion from N24.2 billion.

In terms of highest value, FCMB had the most account maintenance fees of N8.69 billion followed by Fidelity Bank with N8.51 billion.

Stanbic IBTC Holdings recorded N6.77 billion, Sterling Financial Holdings Company had N4.88 billion and Wema Bank with N3.95 billion.

According to the Central Bank of Nigeria (CBN), account maintenance fees are charged on current accounts only regarding customer-induced debit transactions to third parties and debit transfers/lodgements to the customer’s account in another bank.

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

The bank account maintenance fee is charged by banks to customers who maintain accounts with them. This fee is generally charged monthly, quarterly, or annually which depends on the type of account.

Cards linked to savings accounts attract a maximum of N50 quarterly maintenance fee while foreign currency-denominated debit/credit cards attract $10 from $20, according to CBN.

In December 2019, the apex bank revised downwards most charges and fees for banking services in its updated guide to charges by banks, other financial, and non-bank financial institutions which took effect from January 1, 2020.

The CBN’s directive on bank charges said, “Nigerian banks are allowed to charge their customers a ‘negotiable’ N1 per mille.”

This implies that banks can charge N1 per N1000 debit transactions on current accounts. Banks’ account maintenance charges come in the form of COT (i.e., Commission on Turnover) which is a charge levied on customer withdrawals by their banks. In Nigeria, these charges are mainly applicable to current accounts.

Analysis of individual banks’ data

FCMB Group

FCMB Group’s account maintenance fees rose to N8.69 billion in 2023 from N6.85 billion in 2022.

The bank’s electronics fees and commissions grew to N17.69 billion from N13.99 billion.

Total fee and commission income increased to N60.78 billion from N44.04 billion.

Net interest income grew to N177.4 billion from N121.9 billion while after-tax profit also rose to N95.52 billion from a profit of N31.12 billion.

FCMB Group has nine subsidiaries divided among three business groups: commercial and retail banking, investment banking, and asset and wealth management.

Fidelity Bank

Fidelity Bank’s account maintenance charge increased to N8.51 billion in 2023 from N5.04 billion in 2022.

The bank’s commission on e-banking activities grew to N3.64 billion from N2.83 billion.

Total fees and commission income rose to N49.67 billion from N34.42 billion.

Net interest income grew to N277.8 billion from N152.7 billion while after-tax profit of the bank surged to N101.3 billion from a profit of N46.72 billion.

The bank is a commercial one in Nigeria headquartered in Victoria Island, Lagos. It is licensed as a commercial bank with international authorisation, by the CBN, the central bank and national banking regulator.

Stanbic IBTC Holdings

Stanbic IBTC Holdings’ account transaction fees grew to N6.77 billion in 2023 from N5.45 billion in 2022.

The bank’s electronic banking income grew to N4.42 billion from N2.51 billion.

Fee and commission revenue rose to N117.8 billion from N96.07 billion.

Net interest income increased to N175.19 billion from N113.12 billion while after-tax profit grew to N140.6 billion from a profit of N80.73 billion.

Stanbic IBTC Holdings, popularly known as Stanbic IBTC, is a financial service holding company in Nigeria with subsidiaries in Banking, Stock Brokerage, Investment Advisory, Asset Management, Investor Services, Pension Management, Trustees Insurance Brokerage and life Insurance businesses.

Sterling Financial Holdings Company

Sterling Financial Holdings Company’s account maintenance fee rose to N4.88 billion in 2023 from N4.11 billion in 2022.

The bank’s e-business commission and fees grew to N8.59 billion from N7.16 billion.

Fees and commission income increased to N34.91 billion from N28.38 billion

Net interest income grew to N90.32 billion from N76.39 billion. After-tax profit for the period surged to N21.52 billion from a profit of N19.29 billion.

Sterling Financial Holdings is a Nigerian financial holding company with two primary subsidiaries such as Sterling bank which offers commercial banking services, and Alternative Bank Limited, which operates as a Non-Interest Banking business.

Wema Bank

Wema Bank’s account maintenance fees surged to N3.95 billion from N2.75 billion.

The bank’s fees on electronic products rose to N7.41 billion from N6.13 billion.

Total fee and commission income increased to N25.14 billion from N16.59 billion.

Net interest income surged to N83.11 billion from N54.23 billion while after-tax profit rose to N23.36 billion from a profit of N11.35 billion.

Wema Bank is licensed by the CBN; the regulator of the nation’s banking sector.