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Thursday, March 23, 2023

Nigerian Banks Fee Income Surge on Economic Recovery 

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The relaxation of the lockdown measures that accelerated economic recovery and gradual improvement in consumer spending have helped lift Nigerian Banks’ fee income as there has been remarkable growth in both volume and value of electronic transfers.

Data gathered by MoneyCentral shows the most liquid and capitalized banks saw their combined fees and commission income increase by 14.67 percent to N188.80 billion in March 2022 from N164.70 billion as at March 2021.

These lenders collectively generated N361.52 billion in non-interest-revenue, which is 42.11 percent higher than 2021’s N254.85 billion.

Bank card fees were pivotal to profit growth even as they operate in a punitive regulatory environment.

Analysts say the bullish run in the equity market has had a positive impact on trading activities as banks are investing in the latest technology with a view to attracting customers.

The Nigerian Stock Exchange All Share index has a year to date return of 24.47 percent as of 2:00 pm on June 9, 2022.

After the reopening of the economy, customers were able to make use of their credit cards at the Automated Teller Machine (ATM) and make payment for transactions using the Point of Sales (POS) at restaurants and shopping malls.

The Q1-2022 GDP figures showed that the Nigerian economy expanded by 3.1 percent y/y in real terms in what was broadly a positive surprise as the growth print topped consensus expectation even amid unprecedented developments in the global economic environment including rising inflationary pressure, higher importation costs (due disruption in the global supply chain), and geo-political uncertainties.

Banks have made efforts to expand their credit cards offering by launching a range of visa cards as they continue to expand digital & retail product offerings through integration and innovation.

Zenith Bank’s e-Token App is a mobile application that generates One Time Passwords (OTPs) used in the authentication of electronic transactions. A one-time password (OTP) is a series of characters that automatically authenticates the user for a single transaction or session. It is also an alternative to the Hardware Token.

As of December 2021, Zenith has 163,398 active POS terminals across the country, and that is 82 percent higher than 2020’s 89,693; the number of ATM terminals stood at 2,086.

Similarly, United Bank for Africa’s *919# Magic Banking is an innovative service that allows customers to carry out all their mobile banking services like Account OpeningFund TransferBalance CheckAirtime Recharge, and a whole of other interesting services, without the need to physically visit the banking hall.

The Guaranty Trust Money Transfer service (GTMT) is designed to enable GTBank account holders in Nigeria to receive funds from any GTBank subsidiary branch in East and West Africa.

The FirstBank Virtual Card is a very convenient alternative to the use of cash and cheques. It gives customers direct access to funds in their operative or wallet accounts.

“Focus remains on sustaining non-interest revenue driven through innovations, synergies and collaboration across our businesses,” said FirstBank in notes to its financial account.

Zenith Bank’s fees and Commission income was up 16.71 percent to N33.48 billion in March 2022 from N28.69 billion the previous year.

Access Bank generated N42.90 billion from fees in the first quarter, and that is 39.60 percent higher than 2021’s N30.73 billion.

GTCO’s fees and commission income was up 28.39 percent to N18.75 billion in the period under review from N14.60 billion as at March 2021.

United Bank for Africa’s fees and commission income increased by 19.30 percent to N24.97 billion in the period under review from N20.36 billion the previous year.

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