Tier-1 banks increase fee, commission income by 35% to N202.5bn

Motolani Oseni

The six-tier one banks operating in the country reported a 35 per cent increase in their fee and commission income from customers to N202.5billion in the first quarter of 2021 (Q1) ended March 31, 2021, as against N150.37 billion declared in the corresponding period in 2020.

The financial institutions are FBN Holdings Plc, United Bank for Africa Plc (UBA), Zenith Bank Plc, Access Bank Plc, Guaranty Trust Bank Plc, and Ecobank Transnational Incorporated (ETI).

In our fact findings, The Daily Times gathered that due to the Coronavirus pandemic, banks in Nigeria have aggressively engaged in non-banking activities to grow their profits.

Although, financial analysts have predicted that banks will face stiffer competition on fees and commission income this year from some strong fintech operators that are capitalized having attracted significant funding in recent months.

The breakdown of the figures, however, showed that 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.

Access Bank followed ETI on the second spot 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 the prior period under review.

Also, Zenith Bank reported a 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 an 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 in 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 tends to 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.