Zenith, Access Bank Lead Nigerian Banks to Rake in N88.9bn in 9 Months From Account Maintenance
- Banks in Nigeria are making huge income from maintaining customers' accounts which leads them to rake in billions of Naira
- Zenith Bank and Access Banks are top earners in the financial sector which see the banks make over N88 billion
- Banks are seeing a rebound in their operations as countries ease restrictions caused by the COVID-19 pandemic in 2020
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Zenith and Access banks are top earners as Nigerian banks rake in over N88 billion from account maintenance charges from January to September 2021.
Data from the quarterly financial statements of the twelve listed banks shows that Zenith Bank, Access Bank and GTBank are top earners on the list of financial institutions in Nigeria, with the highest income generated from account maintenance during the period under review.
Source: UGC
This represents a 39.5 per cent increase compared to N63.7 billion recorded in the same period last year.
It also represents a 41.4% increase compared to N62.9 billion generated in the 9-month period two years ago.
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As businesses around the world reopen after a debilitating year caused by the COVID-19 pandemic, the financial industry is beginning to witness a rebound and massive growth in the period when many people switched to online banking and other platforms for financial transactions.
The Nigeria Bureau of Statistics says the financial sector saw a 25. 5 per cent growth in the third quarter of 2021, from a contraction of 4.54 per cent recorded in the same period the previous quarter, according to Nairametrics.
Top earners
UBA – N7.11 billion
United Bank for Africa came fifth on the list with N7.11 billion revenue from account maintenance, which is 21.6% higher than N5.85 billion recorded in the corresponding period of 2020. Also, compared to N6.04 billion recorded in the same period of 2019, it increased by 7.8%.
It is worth noting that, the pan African bank’s account maintenance income accounts for 8% of the total N88.9 billion recorded by the 12 banks under consideration. In terms of the bottom line, UBA grew its profit after tax by 35.6% year-on-year to N104.6 billion, fourth on the list of highest earners.
FBN Holdings – N11.74 billion
FBN Holdings, the holding company of First Bank of Nigeria saw its account maintenance income surge by 33.3% from N8.81 billion generated in the nine-month period of 2020 to N11.7 billion in 2021. On the other hand, it increased by 19.8% compared to N9.81 billion generated in the same period of 2019.
Despite the growth in account maintenance revenue, gross earnings during the period reduced marginally by 2.8% to N427 billion. This is due to a 12.6% decline in its interest income during the period, which resulted in a year-on-year decline in its bottom line.
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Specifically, profit after tax dropped by 24.8% to N40.85 billion in the 9-month period of 2021 compared to N54.4 billion recorded in the previous year.
GTBank – N13.02 billion
GTBank generated a sum of N13.02 billion from account maintenance income between January and September 2021. This represents a 36.5% increase compared to N9.54 billion recorded in the corresponding period of 2020. Compared to N8.54 billion recorded in 9-month 2019, account maintenance income increased by 52.5%.
However, its net profit dropped by 9.1% compared to N142.3 billion recorded as of the same period in the previous year to stand at N129.4 billion. This was largely affected by the 14.5% decline in its interest income during the period under review.
Access Bank – N16.21 billion
Access Bank, the largest financial institution in the country by customer base and total assets value, boasted of a N16.2 billion income from account maintenance charges, representing 50.9% increase compared to N10.7 billion recorded in a similar period of 2020.
Zenith Bank – N24.18 billion
Zenith Bank seats comfortably in the top position, having generated a sum of N24.2 billion from account maintenance, representing 27.2% of the total income by the 12 banks.
The Bank increased its account maintenance income by 41.9% and 52.9% compared to N17.15 billion and N15.82 billion recorded in the corresponding periods of 2020 and 2019 respectively.
The tier-1 giant printed a year-on-year marginal increase in its profit after tax to N16.6 billion compared to N159.3 billion recorded in the corresponding period of 2020. In comparison to other listed banks, Zenith Bank recorded the highest net profit, representing 24% of the total N668.7 billion recorded by the industry in the period under review.
What is account maintenance charges?
A directive by the Central Bank of Nigeria on bank charges said Nigerian banks are allowed to charge their customers a “negotiable” N1 per mile that is 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 charged on customer withdrawals by their banks. In Nigeria, these charges are mainly applicable to current accounts.
USSD, SMS drive huge earnings for Nigerian banks
Meanwhile, Legit.ng reports that Nigerian banks are cashing out big from electronic transactions. They are being led by Access Bank, First Bank and UBA.
Their earnings occurred from January to September this year. Twelve of the banks listed on the Nigerian Exchange made N200.45 billion from their e-business transactions.
Data from unaudited financials of banks for Q3 in 2021 show that the banks’ revenue from electronic banking spiked by 41 per cent to over N200 billion compared to 2020 when they made N142.1 billion.
Source: Legit.ng
