Nigerian banks continued to leverage fintech in the nine months of 2023, generating a total revenue of N265.269 billion from their electronic businesses.
This represents a 24.42% increase from the N213.204 billion recorded in the previous period of 2022.
The top two earners, in terms of e-business income, were Access Holdings Plc and United Bank for Africa Plc (UBA). Access Holdings earned N70.350 billion while UBA generated N61.161 billion.
Other top earners included FBNH, Zenith Bank Plc, and GTCO.
In addition to the growth in e-business income, These Nigerian banks also reported strong profit before tax of N2.339 trillion in the nine months of 2023. This represents a 160% increase from the N899.925 billion recorded in the same period of 2022.
The strong growth in e-business revenue is a testament to the increasing adoption of fintech solutions in Nigeria.
Fintech is transforming the financial services landscape in the country, making it more accessible, convenient, and affordable for individuals and businesses alike.
The banks’ nine months of e-business earnings are a clear indication that FinTech is having a significant impact on the Nigerian financial sector.
Banks are investing heavily in fintech to improve their product and service offerings, and to meet the growing demand for digital financial services.
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.
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 9 months
Analysis of data collated by Nairametrics from the financial statements of eleven listed banks shows that tier-1 banks such as UBA, Access Bank, First Bank GT Bank, and Zenith Bank led the list of banks with the highest e-business income in the past nine months of 2023.
These banks recorded a combined sum of N244.757 billion from electronic business as against N198.110 billion in 2022. This sum represents 92.26% of the total sum of N244.757 billion generated in the nine months of 2023.
Also, the banks recorded a pretax profit of N2.005 trillion in the period, an increase of 162.68% from the N763.314 billion posted during the quarter. The amount also accounts for 85.69% of the total pretax profits recorded by the banks.
GTCO Holdings – N21.216 billion
- GTCO Holdings reported an e-business income of N30.906 billion, representing an increase of 14.7%, compared to N26.945 billion generated in the equivalent period the previous year.
- The holding company accounted for 11.65% of the total income generated by the eleven banks from electronic banking.
- GTCO Holding, the parent group of GT Bank recorded a nine-month profit before tax of N433.2 billion, representing a year-on-year increase of 155.2% from the same period in 2022. The group also recorded a profit after tax of N367.4 billion during the nine months, representing a year-on-year increase of 181.9% from the corresponding period last year.
- The group recorded a net interest income of N297.5 billion during the nine months, representing a year-on-year increase of 56.9% from last year’s figure.
- The lender’s foreign exchange revaluation gains also appreciated significantly as it moved from a loss position of N7.39 billion as of September 2022 to a gain of N334.35 billion.
Zenith Bank – N33.551 billion
- Zenith Bank Plc posted an e-business income of N33.551 billion during the first nine months of 2023, a decrease of 6.98% compared to N36.069 billion recorded in the corresponding period of 2022.
- The most capitalized bank on the NGX, accounted for 12.65% of the total e-business income by the eleven banks.
- Zenith Bank generated the highest profit with a pre-tax profit of N505 billion in the nine months ending September 2023.
- The company recorded a significant surge from the N202.5 billion reported during the corresponding period last year.
- In only nine months, the group has already surpassed its 2022 earnings. For instance, in 2022, Zenith Bank made N284.7 billion in profit before tax, but in the first nine months of 2023, the group’s profit after tax had already reached N434.2 billion.
FBNH– N48.789 billion
- First Bank’s e-business revenue grew by 22.04% in the nine months of 2023 to stand at N48.789 billion from N39.977 billion recorded in 2022.
- However, the bank’s e-business income accounted for 18.39% of the e-business revenue captured.
- The Group’s profit before tax was up 156.3% to N270.3 billion from N105.5 billion posted in 2022, driven by strong growth in interest income.
- According to the group’s financial statements for nine months, the company’s profit after tax (PAT) was N236.4 billion, a 159,2% increase from the N91.2 billion recorded in the corresponding period in 2022
- The group reported gross earnings of N922.2 billion, up 80.1% y-o-y from N547.2 billion recorded in 2022.
- The company posted a net interest income of N377.0 billion, up 51.4% y-o-y as against N249.5 billion recorded in 2022.
- The group’s non-interest income stood at N326.9 billion, up 108% y-o-y from (Sep 2022: N157 billion).
- Operating expenses were N352.3 billion, up 33.3% y-o-y (Sep 2022: N264.3 billion).
UBA – N61.161 billion
- The Pan African bank recorded a sum of N61.161 billion as e-business income during the first nine months of the year 2023, an increase of 33.77% compared to N45.720 billion recorded in the previous year.
- The bank accounted for 23.06% of the total e-business income realized by the eleven banks.
- UBA recorded a profit before tax of N502.1 billion, marking a year-on-year increase of 262.5% from the corresponding period last year.
- The bank also recorded a profit after tax of N449.3 billion during the nine months, marking a year-on-year surge of 287.2% from the corresponding period last year.
- UBA has been one of the major beneficiaries of rising interest rates in Nigeria, as it has led to rising interest income for the bank.
Access Holdings – N70.350 billion
- Access Holdings Plc, which is the largest commercial bank in the country, generated N70.350 billion from its electronic business, a 42.41% increase from N49.399 billion generated a year earlier.
- This accounted for 26.52% of the total amount generated by the eleven banks under consideration.
- Access Holdings has an impressive number with a nine-month pre-tax profit of N294.4 billion, representing a year-on-year increase of 100.2% from the corresponding period last year.
- The group’s profit after tax of N250.4 billion during the nine months was also an 83% year-on-year increase from the same period in 2022.
- The increase in profits, as declared on the Nigerian Exchange Limited (NGX), is driven by an 84% increase in interest income to N1.05 trillion in nine months of 2023 from N571.74 billion reported in nine months of 2022 and N208.18 billion fees and commission in nine months of 2023, representing an increase of 56% from N133.49 billion reported in nine months of 2022.
- Access Holdings also witnessed a significant 37% year-to-date growth in customer deposits, concluding the nine months at a commendable N12.75 trillion.
Others include
- Sterling Financial Holdings N6.304 billion
- Wema Bank – N5.207 billion
- Stanbic IBTC- N3.242 billion
- Fidelity Bank- N2.848 billion
- Unity Bank-N2.215 billion
- Jaiz Bank- N696 million