6 Tier-1 banks report N202.5bn fee, commission income in Q1
By Kayode Tokede
A total of six leading banks in Nigeria reported 35per cent increase to N202.5billion fee & commission income from customers in first quarter of 2021 (Q1) ended March 31, 2021.
These six banks had reported a total of N150.37billion fee & commission from customers in Q1 2020.
The six banks are Ecobank Transnational Incorporated (ETI), Access bank Plc, FBN Holdings Plc, United Bank for Africa Plc (UBA), Zenith Bank Plc and Guaranty Trust Bank Plc.
Our correspondent gathered that banks in Nigeria have aggressively engaged in non-banking activities to grow profit at the detriment of numerous customers.
However, analysts have expressed that Banks will face stiffer competition on fees and commission income this year as challenger Banks such as Kuda Bank and V-Bank are more capitalized having attracted significant funding in recent months.
These banks offer zero fees as an attractive selling point which they hope will sway customers from the big banks who have long started monetizing their platforms.
An investigation by our correspondent also revealed that, these banks growth in fee & commission are primarily driven by customers’ current account maintenance and Electronic-banking.
Specifically, ETI in the period under review reported the highest fee & commission income to N45.62billion in Q1 2021, 19 per cent increase over N38.48billion reported in Q1 2020.
Following ETI is Access bank with N38.95billion fee & commission income to N27.94 in Q1 2020, representing an increase of 39.4 per cent, while UBA’s fee & commission rose by 24 per cent to N34.96billion in Q1 2021 from N28.23 billion in Q1 2020.
In the period, FBN Holdings reported N34.03billion fee & commission from N25.81 billion reported in prior period under review.
In addition, Zenith bank reported 103.5 per cent increase in its fee & commission to N31.42billion from N15.44billion in Q1 2020 while GTBank’s fee & commission income hits N17.57billion in Q1 2021, 22 per cent increase over N14.46billion reported in Q1 2020.
However, a quick check revealed that five out of the six Tier-1 banks in Nigeria generated N59.8billion from E-business income in Q1 2021, 54.5 per cent increase over N38.7billion reported in Q1 2020.
Notably, Access Bank followed by FBN Holdings top the chart in E-business Income generation in three months of 2021. Our correspondent gathered that Income from digital channels is also classified as electronic business or banking income by the majority of banks.
Access Bank in the period generated N17.92billion in Q1 2021 from N11.45billion in Q1 2021 while FBN Holdings reported 31 per cent increase on its E-business income to N14.4billion from N11.02billion reported in Q1 2020.
While UBA’s E-income statement grew by 50.37 per cent to N12.48billion in Q1 2021 from N8.3billion in Q1 2020, Zenith Bank reported N11.13billion from its E-business income, 104.6per cent increase from N5.4billion reported in Q1 2020.
In addition, GTBank’s reported N3.85billion from E-business income, 54.4 per cent growth from N2.49billion reported in Q1 2020.
Analysts have expressed that the newly USSD fees that customers will pay a flat fee of N6.98 per transaction every time they use USSD services will increase banks E-business income.
According to analysts, “The COVID-19 pandemic also played a major role in bank performance as it affected the expansion of the digital rollout plans earlier on in the year.
However, the pandemic will swing in their favour as Nigerians increasingly relied on mobile banking for transactions while avoiding banking halls for fear of contracting COVID-19.”
In addition to E-business income, our correspondent can report that five banks generated N24.46billion from Account maintenance charges in Q1 2021 from N18.4billion reported in Q1 2020.
Zenith bank with N7.88billion in Q1 2021 from N5.73billion in Q1 2020 leads others on account maintenance charge in the period under review, followed by Access Bank with N5.2billion in Q1 2021 from N3.89billion reported in Q1 2020.
GTBank in Q1 2021 generated N4.2billion from account maintenance charges from N3.29billion reported in Q1 2020 while FBN Holdings reported N4.04billion account maintenance charges in Q1 2021 from N3.14billion reported in Q1 2020.
In addition, UBA reported N3.15billion from account maintenance charges in Q1 2021 from N3.29billion reported in Q1 2020.
