- Nigerian banks recorded N96.483 billion in e-business revenue in Q1 2023, a 23.84% increase from the previous quarter.
- UBA and Access Holdings lead in e-business income, followed by Zenith Bank, FirstBank, and GTBank.
- Fintech is continuing to have a significant impact on the financial services landscape in Nigeria as evidenced by the top banks’ Q1 e-business earnings.
Nigerian banks continued to leverage fintech in the first quarter of 2023, generating a total revenue of N96.483 billion from their electronic businesses.
This represents a 23.84% increase from the N77.907 billion recorded in the previous quarter of 2022.
Top performing banks in terms of e-business income
The top two earners, in terms of e-business income, were United Bank for Africa Plc (UBA) and Access Holdings Plc. UBA generating N20.929 billion while Access Holdings earned N20.664 billion.
Other top earners included Zenith Bank Plc, FirstBank Nigeria Limited, and Guaranty Trust Bank Plc.
The growth in e-business income was driven by the increasing popularity of mobile and online banking in Nigeria. As more and more people use these channels to access financial services, banks are seeing a corresponding increase in revenue.
In addition to the growth in e-business income, Nigerian banks also reported strong profit before tax of N446.722 billion in the first quarter of 2023. This represents a 41.16% increase from the N316.562 billion recorded in the same period of 2022.
E-business income includes revenue from electronic channels, card products, and related services. These channels include mobile applications, USSD channels, automated teller machines (ATMs), agency banking, internet banking, and point of sales (POS) payments.
The growth in e-business income is a positive sign for the Nigerian banking sector. It shows that banks are adapting to the changing needs of customers and are well-positioned to benefit from the growth of the digital economy.
The Impact of Fintech on the Financial Services Landscape
Fintech companies are using technology to provide financial services that are more convenient, affordable, and accessible to consumers and businesses.
One of the most significant impacts of fintech is the increase in financial inclusion.
Fintech companies can reach people who were previously unbanked or underbanked by providing services that can be accessed through mobile phones.
This has led to a significant increase in the number of people who have access to financial services in Nigeria.
Another impact of fintech is the growth in the volume of financial transactions. Fintech companies have made it easier and more convenient for people to make payments, transfer money, and invest their money. This has led to a significant increase in the volume of financial transactions in Nigeria.
The entrance of telecoms into the financial services sector has also had a significant impact. Telecom companies have the infrastructure to reach people in rural areas, where traditional banks are often not present. This has made it possible for more people in rural areas to access financial services.
Fintech is also having an impact on the way that banks operate. Banks are increasingly using fintech solutions to improve their efficiency and reduce their costs.
This has led to an increase in non-interest income for banks, as they can generate more revenue from commissions and fees.
More details on the banks’ e-business performance in Q1 2023
Analysis of data collated by Nairmetrics from the financial statements of twelve listed banks shows that tier-1 banks such as UBA, Access Bank, and Zenith Bank led the list of banks with the highest e-business income in FY 2022.
These banks recorded a combined sum of N82.973 billion from electronic business as against N66.568 billion in 2022. This sum represents 86% of the total sum of N96.483 billion generated in Q1 2023.
Also, the banks recorded a pretax profit of N359.767 billion in the first quarter, an increase of 33.82% from the N268.837 billion posted in Q1 2022. The amount also accounts for 80.53% of the total pretax profits recorded by the banks.
GTCO Holdings – N11.425 billion
GTCO Holdings reported an e-business income of N11.425 billion, representing an increase of 61.78%, compared to N7.062 billion generated in the equivalent period the previous year.
The holding company accounted for 11.84% of the total income generated by the twelve banks from electronic banking.
Guaranty Trust Holding Company (GTCO) recorded a 36.5% increase in profit before tax to N74.1 billion for the first quarter ended March 2023 Q1’2023, from N54.3 billion in the corresponding period of last year, Q1’2022.
Its unaudited consolidated and separate financial statements released to the Nigerian Exchange Limited, NGX, and London Stock Exchange (LSE) for Q1’23 showed that Group’s loan book (net) dipped by 1.5% to N1.86 trillion in March 2023 from N1.88 trillion recorded as at December 2022 while deposit liabilities increased by 9.9% from N4.61 trillion in December 2022 to N5.07 trillion in March 2023.
Zenith Bank – N12.079 billion
Zenith Bank Plc posted an e-business income of N12.079 billion during the first quarter of 2022, a decrease of 18.28% compared to N14.784 billion recorded in the corresponding period of 2022.
The most capitalized bank on the NGX, accounted for 12.52% of the total e-business income by the twelve banks.
Zenith Bank Plc announced a 41% growth in its gross earnings to the tune of N270 billion in Q1 2023 from N191.5 billion in Q1 2022.
The unaudited statement of account submitted to the Nigerian Exchange Group indicated that Zenith Bank recorded a 27% year-on-year increase in profit before tax to N86.6 billion in Q1 2023 from N68 billion in Q1 2022.
Profit after tax also increased by 13% from N58.2 billion to N66 billion during the compared periods.
According to the bank, the growth in the top line was propelled by an increase in both interest income and non-interest income.
Zenith Bank’s interest income surged by 52% to N191.6 billion in Q1 2023 from N126.4 billion in Q1 2022.
Similarly, non-interest income increased by 27% to N72.8 billion from N57.2 billion in the reviewed period.
FBNH– N17.876 billion
First Bank’s e-business revenue grew by 46.64% in the first quarter of 2023 to stand at N17.876 billion from N12.190 billion recorded in 2022.
However, the bank’s e-business income accounted for 18.53% of the e-business revenue captured.
FBN Holdings Plc’s profit before tax (PBT) for the first quarter (Q1) of 2023, grew to N56.105 billion from N36.518 billion reported in 2022. This represents a 53.64% increase.
According to its unaudited Q1 financial statement for the first quarter ended 31 March 2023, Profit after tax (PAT) stood at N50.054 billion as against N32.401 billion in 2021, equally representing 54.48% growth.
The profit was boosted largely by interest income of N179.610 billion reported during the period under review as against N109.448 billion posted in 2022, which is an increase of 64.10%.
The group’s gross earnings also rose by N748.6 billion from N716.8 billion, representing a 4.4% increase.
Access Holdings – N20.664 billion
Access Holdings Plc, which is the largest commercial bank in the country, generated N20.664 billion from its electronic business, accounting for 21.42% of the total amount generated by the twelve banks under consideration.
Its e-business income grew by 2.67% quarter-on-quarter compared to N20.127 billion recorded in the previous year.
According to its unaudited Q1 results, the group released recently at NGX Exchange, Access Holdings grew Interest income by 46.4% to N254.22 billion in Q1, 2023 from N173.688 billion in the corresponding period of 2022. Profits before tax also increased 28.4% to N81,594 billion from N65,559 billion in the review period.
Its gross earning maintained its upswing as it increased to N424.917 billion in the review period, higher than the N295.736 billion recorded in the first quarter of March 2022.
Its profit after tax improved in the first quarter of 2023, to N71.636 billion, compared to the N57.825 billion it realised in the first quarter of 2022.
Also, Access Corporation’s total assets increased to N15.742 trillion as of the end of March 2023, up from N14.998 trillion recorded at the end of December 2022.
UBA – N20.929 billion
The Pan African bank recorded a sum of N20.929 billion as e-business income during the first quarter of the year 2023, an increase of 38.5% compared to N15.110 billion recorded in the first quarter of 2022.
The bank accounted for 21.69 % of the total e-business income realized by the eleven banks.
The Group’s gross earnings rose by 47.5% from N183.9 billion to N271.2 billion; while interest income which stood at N125.9 billion as of March 2022, grew by 53.4% to N191.9 billion in the quarter under consideration.
The results revealed that operating income rose by 39.6% to N175.7 billion, as against N125.9 billion recorded in the corresponding quarter of 2022.
UBA’s profit before tax also rose significantly by 38.25% to N61.4 billion in Q1 2023, from N44.5 billion recorded in the first quarter of 2022.
According to the statement, its profit after tax jumped from N41.5 billion to N53.6 billion, representing an impressive 29.1% increase.
Others include
FCMB – N6.575 billion
Union Bank – N1.967 billion
Wema Bank – N1.523 billion
Unity Bank- N1.288 billion
Stanbic IBTC – N958 million
Fidelity Bank- N955 million
Jaiz Bank – N244 million
What you should know
The rise of fintech is a major challenge to traditional banks in Nigeria. One of the biggest threats posed by fintech firms is their ability to offer mobile banking services. Mobile banking is becoming increasingly popular in Nigeria, as it allows people to access financial services from their smartphones. This is a major advantage for fintech firms, as they do not have the same infrastructure costs as banks.
Another threat posed by fintech firms is their focus on customer experience. Fintech firms are using technology to create a more personalized and user-friendly experience for their customers. This is something that banks have traditionally struggled with, as they have been slow to adopt new technology.
To remain competitive, banks in Nigeria will need to adapt to the rise of fintech. This means improving their technology infrastructure, developing new digital products and services, and enhancing their online and mobile banking capabilities. Banks will also need to invest in cybersecurity to protect their customers’ data.
The future of banking in Nigeria is likely to be a hybrid of traditional and digital banking. Banks that can adapt to the changing landscape and offer the best of both worlds will be the ones that succeed.