Nigerian banks continued to harness fintech in H1 2023, reaping a substantial N192.010 billion in revenue from electronic ventures. This marks a notable 20.32% surge from the N159.577 billion in H1 2022.
United Bank for Africa Plc (UBA) and Access Holdings Plc emerged as the frontrunners in e-business income, with UBA netting N51.076 billion and Access Holdings amassing N43.948 billion.
FBNH, Zenith Bank Plc, and GTCO also ranked among the top earners.
In tandem with the e-business revenue upswing, these Nigerian banks disclosed robust pre-tax profits of N1.665 trillion in H1 2023, signifying a remarkable 132% uptick from the N716.943 billion posted in the corresponding period of 2022.
This impressive e-business revenue expansion underscores the escalating adoption of fintech solutions in Nigeria, even amidst the challenges posed by the Central Bank of Nigeria’s currency redesign and cash swap in Q1 2023.
Fintech is undeniably reshaping the nation’s financial services landscape, enhancing accessibility, convenience, and affordability for individuals and businesses.
Banks are ramping up investments in infrastructure, with a pronounced focus on fintech, to enhance their offerings and cater to the burgeoning demand for digital financial services and financial inclusion.
The growth in e-business income is a direct reflection of the surging popularity of mobile and online banking in Nigeria, reinforcing the sector’s adaptability to evolving customer preferences and its readiness to thrive in the digital economy.
E-business income includes revenue from electronic channels, card products, and related services, through mobile apps, USSD channels, ATMs, agency banking, internet banking, and POS payments.
This surge portends well for Nigeria’s banking sector, positioning it as a key beneficiary of the digital economy’s expansion.
The Impact of Fintech on the Financial Services Landscape
Fintech companies are leveraging technology to provide financial services, rendering them more accessible, affordable, and convenient for both individuals and businesses.
A major consequence of fintech’s rise is the substantial expansion of financial inclusion. By offering mobile-accessible services, fintech entities are bridging the gap for previously unbanked or underbanked populations, significantly boosting financial service accessibility across Nigeria.
Additionally, fintech’s influence is manifest in the surge of financial transaction volumes. Simplified payment processes, seamless money transfers, and enhanced investment opportunities have contributed to a marked increase in transaction volumes within Nigeria’s financial ecosystem.
Telecom giants’ foray into financial services has further magnified this impact, particularly in rural areas underserved by traditional banks.
These telcos bring critical infrastructure to previously underserved regions, broadening financial service access considerably.
Furthermore, fintech innovations are reshaping the operational landscape of banks. In pursuit of efficiency gains and cost reduction, banks are increasingly adopting fintech solutions.
This shift has propelled non-interest income, bolstered by heightened revenue from commissions and fees, further underlining the transformative role of fintech in Nigeria’s financial sector.
More details on the banks’ e-business performance in H1 2023
Analysis of financial data collated by Nairametrics reveals that tier-1 banks, including UBA, Access Bank, First Bank, GT Bank, and Zenith Bank, dominated e-business income in H1 2023.
They collectively earned N172.524 billion, a substantial increase from N143.931 billion in 2022, constituting 89.85% of the total H1 2023 earnings of N192.010 billion.
These banks also reported a pretax profit of N1.104 trillion in H1, reflecting a 78.64% surge from H1 2022’s N618.557 billion, accounting for 66% of the total pretax profits among the banks.
GTCO Holdings – N21.216 billion
GTCO Holdings reported an e-business income of N21.216 billion, representing an increase of 14.22%, compared to N18.574 billion generated in the corresponding period the previous year.
It accounted for 11.04% of the total income generated by the eleven banks from electronic banking.
GTCO reported a profit before tax (PBT) of N327.4 billion, representing an increase of 217.1% over N103.2 billion recorded in the corresponding period ended June 2022.
The Group’s loan book (net) increased by 22.8% from N1.89 trillion recorded as of December 2022 to N2.32 trillion in June 2023, while deposit liabilities grew by 37% from N4.61 trillion in December 2022 to N6.32 trillion in June 2023.
GTCO’s balance sheet remained well structured and resilient with total assets and shareholders’ funds closing at N8.5 trillion and N1.2 trillion, respectively.
Zenith Bank – N22.270 billion
Zenith Bank Plc posted an e-business income of N22.270 billion during the first half of 2023, a decrease of 9.6% compared to N24.635 billion recorded in the corresponding period of 2022.
The most capitalized bank on the NGX accounted for 11.59% of the total e-business income of the eleven banks.
Zenith Bank Plc recorded a growth of 139% in its gross earnings to N967.3 billion for the half year 2023 results from N404.8 billion recorded in the corresponding period of H1, 2022.
The growth in the top line also spurred the bottom line as the Group recorded a 169% year-on-year (YoY) increase in profit before tax, growing to N350.4 billion in H1’23 from N130 billion in H1’22.
Profit after tax also grew by 162% to N291.7 billion in H1, 2023 from N111.4 billion in H1, 2023.
The growth in gross earnings arose from both interest income and non-interest income. Interest income grew by 72% from N241.7 billion in H1 2022 to N415.4 billion in H1 2023, while non-interest income grew by 246% to N515.7 billion from N149 billion.
FBNH– N34.014 billion
First Bank’s e-business revenue grew by 33.19% in the first half of 2023 to stand at N34.014 billion from N25.537 billion recorded in 2022.
The bank’s e-business income accounted for 17.71% of the e-business revenue captured.
FBN Holdings Plc declared N206.3 billion profit after tax for H1, 2023, representing a 213.8% increase from N65.7 billion in H1, 2022.
Profit after tax rose by 231.1% to N187.2 billion as against N56.5 billion in H1, 2022, while earnings per share also rose by 234% to N5.19 higher than N1.55 in H1, 2022.
The gross earnings increased by 82.8% to N656.6 billion from N359.2 billion in H1, 2022. Interest income appreciated by 69.3% from N383.3 billion compared to N226.4 billion in H1, 2022, while non-interest income amounted to N257.9 billion as against N120.6 billion a 113.75% increment.
Operating income for the period under review was up by 81.1% from N273.5 billion in H1, 2022 to N495.3 billion, while impairment charges for losses stood at N57.6 billion from N21.7 billion, a 165.44% increment.
Access Holdings – N43.948 billion
Access Holdings Plc, which is the largest commercial bank in the country, generated N43.948 billion from its electronic business, accounting for 22.88% of the total amount generated by the eleven banks under consideration.
Its e-business income grew by 13.09% during H1, 2023, from N38.861 in H1, 2022.
Access Holdings reported a gross earnings figure of N940.3 billion, reflecting a year-on-year (y/y) growth of 58.9%.
According to the Group, the substantial surge was driven by a combination of a 63.0% growth in interest income and a 51.9% increase in non-interest income.
The Group delivered profit before tax (PBT) and profit after tax (PAT) figures of N167.6 billion and N135.4 billion, translating into a 71.4% y/y and 52.6% y/y growth respectively.
Access Holdings also witnessed a significant 35% year-to-date growth in customer deposits, concluding the half-year at a commendable N12.5 trillion.
The Group experienced a 39.0% y/y increase in total assets and a 40.6% year-on-year rise in shareholders’ funds. As of the mid-year point in 2023, total assets and shareholders’ funds stood at N20.9 trillion and N1.7 trillion, respectively.
UBA – N51.076 billion
The Pan African bank recorded a sum of N51.076 billion as e-business income during the first half of the year 2023, an increase of 40.61% compared to N36.324 billion recorded in the first half of 2022.
The bank accounted for 26.60% of the total e-business income realized by the eleven banks.
UBA Group reported a profit before tax of N404 billion, representing an extraordinary increase of 371% when compared to N85.75 billion recorded in the first half of 2022.
The results also showed as of June 30, 2023, a profit after tax (PAT) of N378.24 billion, representing a leap of 437.8% over H1 2022.
Operating Income grew by 206.6% to N783.96 billion in June 2023; higher than N255.67 billion reported a year earlier.
The Group delivered a 164% growth in its Gross Earnings which rose to N981.78 billion as of June 2023, up from N372.36 billion recorded last year in June 2022.
Customer Deposits also rose by a sharp 42.4% to N11.14 trillion in the period under consideration; as against N7.8 trillion recorded at the end of 2022. Shareholders’ Funds increased to N1.712 trillion reflecting the Group’s strong capacity for internal capital generation.
FCMB – N7.400 billion
Sterling Financial Holdings N4.485 billion
Wema Bank – N3.136 billion
Stanbic IBTC- N2.144 billion
Fidelity Bank- N1.853 billion
Jaiz Bank- N468 million
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