Amid Fintech Threat, UBA, Others Generated N203.71bn Income via E-banking in 9 Months

Kayode Tokede

A total of nine Nigerian banks generated a sum of N203.71 billion from Electronic-business earnings in nine months of 2022 with Access Holdings Plc and United Bank for Africa Plc (UBA) topping the list of highest earners.

Also, the banks reported N186.3billion in income from digital channels in nine months of 2021, an increase of 9.3 per cent despite challenges from Financial Technology (Fintech) companies.

Digital channels such as mobile banking, Automated Teller Machines (ATMs), Unstructured Supplementary Service Data (USSD), Point of Sales (PoS), among others are major sources of non-core banking operation income generation for banks.

Conversely, FBN Holdings, Guaranty Trust Holding Company Plc (GTCO) reported decline among the Tier-1 banks.

Analysis of the banks’ performance showed that Access Holdings grew its E-business income by 7.4 per cent to N49.4billion in nine months of 2022 compared with N45.98 billion reported in nine months of 2021, while UBA announced N47.96billion increase in its E-business income in nine months of 2022, representing an increase of 14 per cent from N41.9 billion reported in nine months of 2021.

Furthermore, Zenith Bank with about 50 per cent increase in E-business income to N36.07billion in nine months of 2022 from N23.99billion in nine months of 2021, doubled its earnings from non-core banking operation that eventually impacted on profit before tax.

As FBN Holdings announced 4.9 per cent drop in E-business income to N39.98 billion in nine months of 2022 from N42.02billion in nine months of 2021, GTCO also announced N15.18billion E-business Income in nine months of 2022, a decline of 3.1 per cent from N 15.67billion in nine months of 2021.

The disruption caused by Central Bank of Nigeria (CBN) Payment Service Bank (PSB) licenses to MTN Nigeria and Airtel Africa also plunged most Tier-2 banks’ revenue from non-core banking operation but they were able to report stellar performance in profit.

It is worth noting that Stanbic IBTC Holdings, Union Bank of Nigeria and Fidelity recorded drop in E-business income in the period under review.

Stanbic IBTC Holdings reported N1.63 billion E-business income in nine months of 2022, a decline of 36 per cent from N2.53billion in nine months of 2021, while Union Bank of Nigeria announced 16 per cent drop in its E-business income activities to N5.68 billion in nine months as against N6.7billion reported in nine months of 2021.

Also, Fidelity bank announced 7.4 per cent drop in commission on E-banking activities to N2.24biillion in nine months of 2022 from N2.42billion reported in nine months of 2021.

With about 11 per cent increase, Sterling Bank is the only bank with Tier-2 banks under review with an increase in E-business commission and fees.

The bank reported N5.57billion income from E-business income in nine months of 2022 from N5.02billion reported in nine months of 2021.

 Commenting, analyst at Vetiva Research had expressed that the PSB licences issued by CBN to MTN Nigeria and Airtel posed a threat to some lines of the banks’ businesses in 2022.

Analyst at Vetiva, Joshua Odebisi said, “banks’ focus will continue to shift towards Non-Interest Revenue growth, although headwinds pose a challenge to this strategy. Banks continued to face stiffer competition in 2022 such as Flutterwave, Kuda Bank, Carbon, PiggyVest, V-Bank, among others 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 banks who have long started monetizing their platforms.”