Nigerian banks boost fees, commission income with digital services

Nigerian banks are raking in income from electronic banking as the industry is increasingly reliant on emerging digital technologies to attract and retain customers.

Total income from the electronic businesses of 11 banks rose to N193.51 billion in H1 2023, up 19.7 percent from N161.63 billion recorded in 2022, according to data compiled by BusinessDay.

“The rise in electronic banking income is a factor of the amount of volume that banks have transacted with during the first half of 2023. People are doing more transactions online rather than using cash,” Tesleemah Lateef, a bank analyst at Cordros Securities Limited said.

She said the volume of online transactions has increased because the cashless policy in the first quarter of 2023 has led to more people doing more transactions online. “If charges remain the same and volume of transaction increase then banks will rake in more money from electronic banking.”

“The increase in electronic banking income is attributable to the Q1 cash scarcity because the period revealed that there is no transaction without being cashless hence banks had to make their IT infrastructure functional to enable them to gain traction from their end which led to increase in revenue from the income scheme,” Nabila Mohammed, research analyst at Chapel Hill Denham said.

Findings showed financial institutions are using Fintech products to boost their operations and enhance customer satisfaction through the introduction of applications that ensure transactions are carried out expeditiously.

These investments by brick-and-mortar banks are paying off as lenders have recorded a remarkable growth in electronic business commissions and fees which invariably show an increase in their total fees and commissions income.

Further analysis reveals that the total fees and commissions received by 11 banks amounted to N614.15 billion in H1 2023 from N491.07 billion in the similar period of 2022.

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The banks analysed United Bank for Africa, Access Holdings, FBN Holdings, Zenith Bank, Guaranty Trust Holding Company(GTCO), First City Monument Bank(FCMB), Sterling Holdings, Wema Bank, Stanbic IBTC Holdings and Fidelity Bank.

Analysis of banks’ electronic banking income

BusinessDay analysis reveals United Bank for Africa recorded the most electronic banking income of N51.08 billion, followed by Access Holdings in second place with a record of N43.95 billion, FBN Holdings recorded N34.01 billion, Zenith Bank recorded N22.27 billion and GTCO recorded N21.22 billion.

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United Bank for Africa(UBA)

United Bank for Africa’s electronic banking income increased to N51.08 billion in H1 2023 from N36.32 billion in the same period of 2022.

The bank’s electronic banking income contributed 40.6 percent to the total fees and commission income in the first half of 2023.

UBA’s total fees and commission income amounted to N125.93 billion from N96.40 billion while account maintenance earnings increased to N9.64 billion from N6.6 billion.

United Bank for Africa Plc is a Multinational pan-African financial services group headquartered in Lagos and known as Africa’s Global Bank. It has subsidiaries in 20 African countries and offices in London, Paris, and New York. In December 2021, UBA received its banking license to commence operations in the UAE.

Access Holdings

Access Holdings electronic banking income surged to N43.95 billion in H1 2023 from N38.86 billion in the same period of 2022.

The holding company’s electronic banking income contributed 35.2 percent to the total fees and commission income in the first half of 2023.

Access Holdings’ total fees and commission income amounted to N125.02 billion from N81.1 billion while account maintenance earnings increased to N13.36 billion in H1 2023 from N12.04 billion in the same period of 2022.

Access Holdings Plc is a Nigeria-based financial holding company. The company’s business segments include banking, consumer lending, payment services, insurance brokerage, and pension fund administration. Its subsidiaries include Access Bank Plc (the Bank), Hydrogen Payment Services Company, and Access Pensions Limited.

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FBN Holdings

FBN Holdings electronic banking income surged to N34.01 billion in H1 2023 from N25.54 billion in the similar period of 2022.

The holding company’s electronic banking income contributed 38.3 percent to the total fees and commission income in the first half of 2023.

FBN Holdings fees and commission income increased to N88.85 billion from N70.69 billion while account maintenance earnings increased to N9.17 billion from N9.11 billion.

FBN Holdings Plc. is a Nigeria-based diversified financial services company. The principal activities of the Company are mainly the provision of commercial banking services, investment banking services, and provision of other financial services and corporate banking.

Zenith Bank

Zenith Bank’s electronic banking income dropped to N22.27 billion in H1 2023 from N24.64 billion in the same period of 2022.

The bank contributed 27.8 percent to the total fees and commission income in the first half of 2023.

Zenith Bank fees and commission income increased to N80.07 billion from N78.5 billion while account maintenance earnings rose to N21.02 billion from N19.77 billion.

Zenith Bank Plc is a financial service provider in Nigeria and Anglophone West Africa. It is licensed as a commercial bank by the Central Bank of Nigeria, the national banking regulator. As of 31 December 2019, it holds $16.1 billion in total assets, with shareholders’ equity of $854 million.

Guaranty Trust Holding Company(GTCO)

GTCO recorded electronic banking income of N21.22 billion in H1 2023 from N18.57 billion in the same period of 2022.

The holding company contributed 36.3 percent to the total fees and commission income in the first half of 2023.

GTCO fees and commission income increased to N58.42 billion from N54.08 billion while account maintenance earnings rose to N21.22 billion from N18.57 billion.

Guaranty Trust Holding Company PLC also known as GTCO PLC 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.

First City Monument Bank(FCMB)

FCMB’s electronic banking income increased to N7.4 billion in H1 2023 from N6.7 billion in the same period of 2022.

The holding company contributed 26 percent to the total fees and commission income in the first half of 2023.

FCMB fees and commission income increased to N28.47 billion from N22.07 billion while account maintenance earnings rose to N3.85 billion from N3.32 billion.

First City Monument Bank (FCMB), a member of FCMB Group Plc, is a financial services holding company headquartered in Lagos. FCMB Group Plc has nine subsidiaries divided among three business groups: commercial and retail banking, investment banking, and asset and wealth management.

Sterling Holdings

Sterling Holdings’ electronic banking income stood at N4.49 billion in H1 2023 from N3.92 billion in the similar period of 2022.

The holding company contributed 28.3 percent to the total fees and commission income in the first half of 2023.

Sterling Holdings fees and commission income increased to N15.89 billion from N13.27 billion while account maintenance earnings grew to N2.39 billion from N1.85 billion.

Sterling Bank Ltd is a full-service national commercial bank licensed by the Central Bank of Nigeria. The bank provides services to individuals, small businesses, and large corporations.

Wema Bank

Wema Bank’s electronic banking income grew to N3.14 billion in H1 2023 from N1.65 billion in the same period of 2022.

The bank contributed 31.3 percent to the total fees and commission income in the first half of 2023.

Wema Bank’s fees and commission income rose to N10.03 billion from N7.48 billion while account maintenance earnings increased to N1.64 billion from N1.29 billion.

Wema Bank Plc, commonly known as Wema Bank, is a Nigerian commercial bank. It is licensed by the Central Bank of Nigeria; the regulator of the nation’s banking sector.

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Stanbic IBTC Holdings

Stanbic IBTC Holdings electronic banking income dropped to N2.14 billion in H1 2023 from N2.44 billion in the same period of 2022.

The holding company contributed 4 percent to the total fees and commission income in the first half of 2023.

Stanbic IBTC Holdings fees and commission income increased to N53.8 billion from N48.2 billion while account maintenance earnings grew to N2.64 billion from N2.37 billion.

Stanbic IBTC Holdings, commonly called 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.

Unity Bank

Unity Bank’s electronic banking income increased to N1.96 billion in H1 2023 from N1.64 billion in the similar period of 2022.

The bank contributed 55.7 percent to the total fees and commission income in the first half of 2023.

Unity Bank fees and commission income amounted to N3.52 billion from N3.2 billion while account maintenance earnings dropped to N742.61 million from N744.86 million.

Unity Bank, also known as Unity Bank plc, is a commercial bank in Nigeria. The bank offers wide-ranging financial services to individuals, businesses, and the public sector of the nation’s economy.

Fidelity Bank

Fidelity Bank’s electronic banking income increased to N1.85 billion in H1 2023 from N1.35 billion in the same period of 2022.

The bank contributed 7.7 percent to the total fees and commission income in the first half of 2023.

Fidelity Bank’s fees and commission income increased to N24.15 billion from N16.08 billion while account maintenance earnings rose to N3.38 billion in H1 2023 from N2.34 billion in the same period of 2022.

Fidelity Bank, also known as Fidelity Bank Plc is a commercial bank in Nigeria headquartered in Victoria Island, Lagos. It is licensed as a commercial bank with international authorization, by the Central Bank of Nigeria, the central bank and national banking regulator.