Here is why banks’ customer deposits rose by 55% in 2023

Customers deposits in eleven Nigerian banks have surged by 55 percent in the first nine months of 2023.

BusinessDay’s analysis of the banks’ financial statements showed customer deposits received by banks grew to N62.71 trillion in the nine months of 2023 from N40.5 trillion in the same period of year.

The banks are Zenith Bank, United Bank for Africa (UBA), Access Holdings, Wema Bank, Stanbic IBTC Holdings, Guaranty Trust Holding Company (GTCO), Unity Bank, FBN Holdings, Fidelity Bank, FCMB Group and Sterling Financial Holdings.

Further analysis showed Zenith Bank recorded the highest growth in deposits to customers which stood at 66.4 percent.

Followed by UBA with 65.4 percent, Access (55.6 percent), Stanbic IBTC(55.3 percent) and Wema (52.8 percent).

Experts attributed the increase in bank deposits to several factors, including the federal government’s borrowing from the Central Bank of Nigeria (CBN), the push for financial inclusion as well as the boost in the naira equivalent of the dollars in domiciliary accounts, and increased federal allocations to states following the devaluation of the naira.

According to the CBN, money supply in the economy hit a record high of N67.28 trillion in September, up from N52.16 trillion at the end of last year.

“Inflationary pressures will go up because money supply has increased. When customer deposits increase, it means banks have more money to lend,” Johnson Chukwu, managing director of Cowry Asset Management Limited, said.

He added that the central bank’s loans have pushed up money supply in the country, adding that the increase in customer deposits has helped boost banks’ profitability.

“Since June, FAAC allocations to states and the federal government have increased significantly and that may also have generated a lot of economic activities related to government transactions, which possibly will have reflected in the movement of cash and deposits within the banking sector,” Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said.

He said a likely uptick in economic activities post-election may have also boosted bank deposits.

Firm-by-firm analysis

Zenith Bank

Zenith recorded N13.38 trillion in deposits from customers in the nine months of 2023 from N8.04 trillion in the same period of 2022.

Net interest income surged to N415.23 billion from N282.91 billion. Profit-After-Tax rose to N434.17 billion from N174.33 billion.

The bank is a large financial service provider in Nigeria and Anglophone West Africa, headquartered in Victoria Island, Lagos. It is licensed as a commercial bank by the Central Bank of Nigeria, the national banking regulator.

Access Holdings

Access Holdings recorded N12.75 trillion in deposits from customers in the nine months of 2023 from N8.19 trillion in the same period of 2022.

Net interest income surged to N389.96 billion from N280.29 billion. Profit for the period amounted to N250.45 billion, up from N136.77 billion.

Access Microfinance Holding AG, often referred to as Access Holding, is a commercial microfinance investment and holding company based in Germany. It specialises in start-ups and early-stage microfinance institutions.

UBA

UBA’s deposits from customers surged to N11.63 trillion in nine months of 2023 from N7.03 trillion in the same period of 2022.

Net interest income grew to N443.08 billion from N282.51 billion. Profit for the period increased to N449.3 billion from N116.04 billion.

The bank is a multinational pan-African financial services group headquartered in Lagos Island, Lagos, and known as Africa’s Global Bank. It has subsidiaries in 20 African countries and offices in London, Paris, and New York

FBN Holdings

FBN Holdings’ deposit from customers stood at N9.25 trillion in nine months of 2023 from N6.6 trillion in the same period of 2022.

Net interest income surged to N377.7 billion from N249.53 billion. Profit for the period rose to N236.5 billion from N91.29 billion.

The company provides commercial banking activities and offers merchant, investment banking, trusteeship, fund management, registrars, among others.

GTCO

GTCO’s deposit from customers rose to N6.25 trillion in nine months of 2023 from N4.26 trillion in the same period of 2022.

Net interest income grew to N297.54 billion from N189.69 billion. Profit for the period rose to N367.42 billion from N130.35 billion.

The company is a multinational financial services group, that offers retail and investment banking, pension management, asset management and payments services, headquartered in Victoria Island, Lagos, Nigeria. It was created in July 2021 following the corporate reorganisation of Guaranty Trust Bank Plc (or GTBank) into a Holding Company

Fidelity Bank

Fidelity’s deposits from customers grew to N3.44 trillion in nine months of 2023 from N2.29 trillion in the similar period of 2022.

Net interest income increased to N194.96 billion from N111.85 billion. Profit for the period rose to N91.75 billion from N34.96 billion.

The commercial bank in Nigeria is 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.

FCMB Group

FCMB’s deposit from customers increased to N2.53 trillion in nine months of 2023 from N1.82 trillion in the same period of 2022.

Net interest income increased to N120.47 billion from N93.06 billion. Profit for the period jumped to N49.15 billion from N22.92 billion.

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

Stanbic IBTC Holdings

Stanbic IBTC Holdings’ deposit from customers grew to N1.77 trillion in the nine months of 2023 from N1.14 trillion in the same period of 2022.

Net interest income grew to N120.5 billion from N79.66 billion. Profit for the period surged to N109.25 billion from N55.19 billion.

The financial service holding company has subsidiaries in banking, stock brokerage, investment advisory, asset management, investor services, pension management, trustees insurance brokerage and life insurance businesses.

Wema Bank

Wema Bank’s deposits from customers increased to N1.65 trillion in the nine months of 2023 from N1.08 trillion in the same period of 2022.

Net interest income increased to N55.74 billion from N38.47 billion. Profit for the year stood at N19.24 billion, up from N8.18 billion.

The commercial bank is licensed by CBN, the regulator of the nation’s banking sector.

Sterling Financial Holdings

Sterling Financial Holdings’ deposits from customers grew to N44.99 billion in the nine months of 2023 from N40.9 billion in the same period of 2022.

Net interest income rose to N68.5 billion from N54.55 billion. Profit after tax for the period increased to N16.49 billion from N13.4 billion.

The company operates through its subsidiaries such as Sterling Bank Limited and Alternative Bank. The full-service national commercial bank is licensed by the CBN. It provides financial services to individuals, small businesses, and large corporations.

Unity Bank

Unity Bank’s deposits from customers increased to N16.97 billion in the nine months of 2023 from N12.4 billion in the same period of 2022.

Net interest income dropped to N9.47 billion from N14.53 billion. The firm recorded a loss of N47.92 billion from a profit of N2.03 billion.