Eight DMBs Generated N59.67bn from Account Maintenance Fees in Q1 2024

Kayode Tokede

About eight Deposit Money Banks (DMBs) listed on the Nigerian Exchange Limited (NGX) generated a whopping sum of N59.67 billion from account maintenance income in the first quarter (Q1) of 2024.

This represents 83.01 per cent increase over the N32.61 billion reported in the first quarter of 2023.

The eight banks are: Zenith Bank Plc, Access Holdings Plc, United Bank for Africa Plc (UBA) and Guaranty Trust Bank Holdings Plc (GTCO).

Others include: FCMB Group Plc, Stanbic IBTC Holding Plc, Wema Bank Plc and Fidelity Bank Plc.

Extract from the banks’ unaudited Q1 2024 results revealed that Zenith Bank generated the highest account maintenance fee of about N16.9 billion, an increase of 66 per cent from N10.19 billion in Q1 2023, followed by Access Holdings that generated N13.8billion account maintenance fee in Q1 2024, a growth of about 110 per cent from N6.68billion reported in Q1 2023. 

For GTCO, its account maintenance fee stood at N9.41 billion in Q1 2024, representing about 72 per cent growth from N5.46billion in Q1 2023, while UBA’s account maintenance fee moved from N5.35billion in Q1 2023, increasing about 75 per cent to N9.35billion in Q1 2024. 

Fidelity Bank declared N4.95 billion account maintenance fee in Q1 2024, a significant increase of 208 per cent from N1.61 billion in Q1 2023; FCMB Group posted N2.73 billion account maintenance fee in Q1 2024, about 49 per cent increase from N1.8 billion in Q1 2023; Wema Bank announced N1.47 billion account maintenance fee in Q1 2024, representing 99.7 per cent from N734.1million in Q1 2023 and Stanbic IBTC Holdings posted N1.06billion account maintenance fee in Q1  2024, an increase of 25 per cent from N849million declared in Q1 2023.

The eight DMBs in the 2023 financial year generated about N145.58 billion for maintaining customers accounts, a significant increase of 21 per cent from N 120.06 billion declared in 2022 financial year.

Nigerian DMBs are competing with Fintech companies such as, MoMo Payment Service Bank (MoMo PSB), Fintech subsidiary of MTN Nigeria. Airtel SmartCash,  Opay, Palmpay, others that charges customers zero charges on fund transfer to another Fintech company or commercial banks.

As technology evolves, customer demands continue to affect how businesses operate especially in the banking sector. In recent times, fintech startups have raised the bar, offering customers easier, faster, and cheaper financial services particularly in areas such as zero transfer fees, more attractive interest rates on savings, full online banking experience, speed and simplicity.

These competitive advantages are endearing them to an increasing number of customers and strengthening their position in the financial sector.

With the emerges of more Fintech companies, electronic payment transactions in Nigeria hit an all-time high in 2023 as it rose by 55 per cent to N600 trillion, compared to N387 trillion in 2022, according to Nigeria Inter-Bank Settlement System (NIBSS).

The CBN had indirectly reintroduced Commission on Turnover fee as the Current Account Maintenance fee. The apex bank in 2013 commenced the phased reduction of the CoT, which terminated with the zero CoT charge this year.

 But in a circular to banks recently, the CBN replaced the CoT with CAM but subject to a maximum of N1 per N1,000 mille.

The circular was titled, “Introduction of Negotiable Current Account Maintenance Fee Not Exceeding N1/mille.”

It stated, “The revised guide to bank charges which came into effect on April 1, 2013 provides for a phased elimination of the COT charges in the Nigerian banking industry. Under the guidelines, a zero COT regime was to come into effect from January 2016.”

The CBN noted that while the gradual phase out was being observed, some banks continued to charge account maintenance fee in addition to the reduced COT rate, which in effect amounted to double coincidence of charges.

It stated, “The CBN is not oblivious of the impact of declining crude oil prices, operation of Treasury Single Account, and other market turbulence on the viability and stability of the banking system.

“In furtherance of the mandate to promote and safeguard a sound financial system in Nigeria, banks are by this circular reminded that the 2016 Zero COT regime as jointly agreed during the 311th Bankers Committee meeting of February 12, 2013 has come into effect. In the interest of stability of the banking system, a Negotiable Current Account Maintenance Fee not exceeding N1 per mille may be charged in respect of all customer-induced debit transactions. Please ensure strict compliance.”