Access Bank, FBN, and UBA led the list of banks in Nigeria with highest electronic business income in the 9-month period of 2021. The twelve banks listed on the Nigerian Exchange raked in a sum of N200.45 billion from their e-business unit between January and September 2021.
This is according to data sourced from the unaudited financials of the various banks for Q3 2021. Banks revenue from electronic banking surged by 41.1% to N200.45 billion compared to N142.1 billion recorded in the corresponding period of 2020.
Considering the monetary stance of the apex bank to keep interest rates low in order to encourage borrowings and stimulate the economy from the covid-19 induced recession in the previous year, commercial banks have had to ramp up efforts to boost revenue from other generating units.
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This is evidenced by the significant growth recorded in their e-business income, which has helped cushion the effect of the dwindling interest income on their bottom line.
In our usual fashion of analysing the performance of banks in Nigeria, Nairametrics presents the top earning banks from their various e-business units. The list was dominated by the five tier-one banks in the country, commonly referred to as FUGAZ.
GTCo – N16.67 billion
The newly restructured bank, GTCo generated a sum of N16.67 billion as e-business income between January and September 2021, representing a 91.1% increase compared to N8.21 billion recorded in the previous year.
GTCo recorded the highest surge in e-business income, and was able to fill some gap as the interest income compared to the previous year, declined by 12.5% to N195.04 billion in 9M 2021.
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Zenith Bank – N23.99 billion
Zenith Bank increased its electronic business income by 29.9% from N18.46 billion recorded in 2020 to N23.99 billion in the period under review. On the other hand, its interest income dipped marginally by 3.1% to N308.88 billion compared to N318.82 billion recorded in the previous year.
UBA – N41.9 billion
United Bank for Africa stood third position on the list with N41.91 billion e-business income, which represents a 50.4% increase compared to N27.87 billion recorded in the corresponding period of 2020.
Similarly, its profit after tax grew by 35.6% to N104.6 billion with interest income at N343.7 billion in 9-month 2021, representing an increase of 8.4%.
FBN Holdings – N42.02 billion
First Bank boosted its e-business income by 21.5% from N34.6 billion generated in 9-month 2020 to N42.02 billion in the period under review. Despite being one of the oldest banks in the country, First Bank has been at the forefront of the mobile banking revolution.
The bank was one of the pioneers of the USSD platform which is used to transfer money via a text messaging application of a mobile phone. Despite the growth in e-business income, FBN recorded a 24.8% decline in profit after tax, largely affected by a 12.6% decline in interest income compared to the previous year.
Access Bank – N46.25 billion
Nigeria’s largest bank by customer base and total assets, generated a sum of N46.25 billion from e-business in the 9-month period ended September 2021. This is 60.6% higher than N28.8 billion recorded in the comparable period of 2020.
In the same vein, its profit after tax improved by 19.1% to N121.9 billion in contrast to N102.3 billion printed in 9-month 2020. A cursory look at the financial position shows that Access Bank grew its total assets by 19.6% to N10.37 trillion from N8.67 trillion recorded as of the beginning of the year.
Why the surge?
Nigeria has been experiencing a massive boost in electronic-driven banking as increasing mobile phones adoption and viral social media activities lead to massive consumption of data and spending across several channels.
- The banking sector is also benefitting massively from the wave of mobile phone adoption proving easy to use banking apps that are secure and operate seemingly like social media apps.
- As the Central Bank has maintained its monetary stand, leaving the monetary policy rate (MPR) at 11.5%, which means potentially lower interest income for banks, the banks now have to look to other viable revenue generating unit.
- Meanwhile, the financial technology space continues to attract significant investments with more and more fintech firms and telcos offering more financial services. For example, the Central Bank of Nigeria (CBN) granted MTN and Airtel “Approval in Principle” to operate as Payment Service Banks.
- It is pertinent to note that electronic banking revenues are generated through various digital transactions utilized by the customers of a bank. The revenue is spawned through fees and commissions gotten through transactions like mobile applications, Automated Teller Machines (ATM), USSD channels, internet banking, Point of Sales (POS) payments, and agency banking.
Note: This analysis excludes the cost of earning the income. The ranking will be significantly different if expenses incurred in earning the income is net off.