Buoyed by Drive to Boost Non-interest Income, 10 Banks Generate N259.6bn from Charges in Q1

Nume Ekeghe

As deposit money banks (DMBs) in Nigeria strive to boost their Non-Interest Income, a total of 10 banks in the first quarter of 2022 generated N259.16 billion from fee & commission paid customers, representing an increase of 24.7per cent over N207.8 billion reported in the prior period.

Analysis of banks unaudited results and accounts for period ended March, 31, 2022, revealed that Access Holdings Plc, followed by Ecobank Transnational Incorporated (ETI) lead in the renewed effort by banks to aggressively grow customers fee and commission.

Other banks are; United Bank for Africa Plc (UBA), Zenith Bank Plc, Stanbic IBTC Holdings Plc, Guaranty Trust Holding Plc (GTCO), Fidelity Bank Plc, Sterling Bank Plc FCMB Group Plc and Wema Bank Plc. 

Key contributing factors to banks fee and commission were credit related fees and commissions, Account maintenance charge and handling commission, electronic banking income, commission on foreign exchange deals, among others.

As was expected, the growth in fee and commission income impacted on the banks’ Non-Interest Income (NII).

Further analysis of the Q1 2022 unaudited results and accounts revealed that Access Holdings generated N56.3 billion as fee, commission from customers, an increase of 45 per cent from N38.95 billion in Q1 2021. 

Fees from channels and other electronic- business income contributed 35.7 per cent to Access Holdings fee & commission to N20.13billion in Q1 2022 from 46 per cent or N17.92 billion reported in Q1 2021. 

Access Holdings in 2021 financial year generated N159.2 billion fees and commissions from customers’ transactions, representing an increase of 36 per cent compared to N116.7billion in 2020.

The Group Executive Officer, Access Holdings, Mr.  Herbert Wigwe had while speaking with investors/analysts recently said the growth was largely underlined by income from increased transaction velocity across all channels and other e-businesses as well as credit related fees and commissions which grew by 33 per cent. 

According to him: “We will continue to gain traction on our income from these lines as we extend our retail and loan offerings.”

Meanwhile, ETI’s fee and commission from customers grew by 21.6 per cent to N55.48 billion in Q1 2022 from N45.62 billion in Q1 2021.

The bank in a statement said: “Non-interest Income was $198 million (N82.23 billion) for the first quarter of 2022, increasing by 15per cent or $25 million (N69.29 billion), by 25per cent on a constant currency basis, boosted by the continued robustness in client and customer activity following the lifting of most of the Covid-19 pandemic-induced restrictions. 

“As a result, net fees and commission income increased by 16per cent or $16 million to $116 million, with fees generated on Cards rising by 30per cent to $24 million, credit-related fees increased by 17per cent to $37 million, and cash management fees rose by nine per cent to $54 million. 

“Additionally, NIR benefited from net trading income, which increased by 12per cent or $8 million to $72 million, predominantly driven by a 216per cent increase in fixed-income trading to $34 million, partially offset by a decrease in client-related foreign-currency sales of 29per cent to $38 million. 

“As a result, the contribution of non-interest revenue to total net revenue (the NIR ratio) was 45per cent versus 42per cent in the year-ago period.”

Also, while UBA grew fee and commission income from customers to N42.1billion in Q1 2022 from N34.96billion in Q1 2021, Zenith Bank reported N33.49billion fee and commission from customers in Q1 2022 from N28.69billion in Q1 2021. 

According to Zenith bank: “Going forward into the rest of the year, the Group will continue to focus on sustainable growth across all its business segments, deploy technology platforms and digital assets intuitively to serve the needs of its various customers in order to deliver enhanced returns to its stakeholders.”

Stanbic IBTC Holdings in the period under review reported N23.13billion fee and commission income from customers from N22.17billion reported in prior period.

Fidelity Bank reported 32 per cent fee and commission income from customers increase in Q1 2022 to N7.9billion from N6.01billion in Q1 2021, while Sterling Bank reported N5.13billion fee and commission income from customers in Q1 2022 from N3.65billion in Q1 2021.

In addition, FCMB group reported 34 per cent increase fee and commission income from customers’ transactions to N10.23billion in Q1 2022 from N7.66 billion in Q1 2021, while Wema Bank reported N4.05 billion fee and commission in Q1 2022 from N2.56 billion in Q1 2021.