Notwithstanding the effect of COVID-19 on the economy, the Nigerian banks listed by the Nigerian Exchange recorded a surge of N88.9billion in the fees generated from account maintenance in 9 months. The revenue generated has an increase of 41.4% compared to N62.9 billion generated in 2019 and a 39.5% increase compared to the N63.7 billion generated for 2020.
According to the National Bureau of Statistics (NBS), the banking sector expanded by 25.5% in the third quarter (Q3) of 2021 compared to a contraction of 4.54% in the second quarter. The highest-ranking Nigerian banks on the list are Zenith Bank, Access Bank and Guarantee Trust Bank (GTB).
The Central Bank of Nigeria (CBN) empowers the Nigerian banking sector to charge customers a “negotiable” N1 per mille. This amount accounts for a considerable amount of the bank’s non-interest income.
Nigerian banks charge the account maintenance fees in the form of Commission on Turnover (COT), which is a fee assessed by banks on customer withdrawals. These fees are primarily applied to current accounts in Nigeria.
Here is a run-down of the banks.
Zenith Bank – N24.18 billion
Zenith Bank tops the rank with N24.2 billion in account maintenance revenue, accounting for 27.2%of the total income generated by the 12 banks. Zenith Bank boosted its account maintenance income by 41.9% in 2020 and 52.9% in 2019 compared to N17.15 billion and N15.82 billion in 2020 and 2019, respectively.
Also, Zenith bank made a profit after tax increased marginally year on year to N16.6 billion, compared to N159.3 billion in 2020. In comparison to other banks, Zenith Bank had the largest net profit, accounting for 24% of the industry’s total N668.7 billion.
Access Bank – N16.21 billion
Access Bank is the country’s largest financial institution by customer base and total assets worth. It generated N16.2 billion from account maintenance fees, a 50.9% increase compared to N10.7 billion earned in the same period of 2020.
In the same vein, the bank, which is preparing to restructure into a non-operating financial holding company, increased its earnings after tax to N121.9 billion from N102.3 billion last year, indicating a 19.1% year-on-year gain.
GT Bank – N13.02 billion
Between January and September 2021, GT Bank earned N13.02 billion in account maintenance fees. This indicates a 36.5% increase over the N9.54 billion reported in 2020 and an increase of 52.5% from N8.54 billion recorded in 2019.
However, its net profit fell by 9.1% to N129.4 billion from N142.3 billion in the same period in 2020. This was primarily due to a 14.5% drop in interest income over the period under consideration.
UBA – N7.11 billion
United Bank for Africa was ranked fifth on the list, with N7.11 billion in account maintenance revenue, which is 21.6% from N5.85 billion in the same period of 2020. In addition, it rose by 7.8% when compared to the N6.04 billion recorded in the same time of 2019.
United Bank of Africa’s accounts for 8% of the total N88.9 billion account maintenance income reported by the 12 banks. UBA’s profit after tax increased by 35.6% year on year to N104.6 billion, putting it fourth on the list of highest earners.
FBN Holdings – N11.74 billion
The account maintenance income of FBN Holdings, the parent company of First Bank of Nigeria, increased by 33.3% from N8.81 billion in the 9 months of 2020 to N11.7 billion in 2021. Compared to the N9.81 billion generated in the same time of 2019, it increased by 19.8%.
Despite the increase in account maintenance revenue, gross earnings during the period fell by 2.8% to N427 billion. This is owing to a 12.6% drop in interest income during the period, resulting in a year-over-year drop in the company’s bottom line.
Also, profit after tax fell by 24.8% to N40.85 billion in the first nine months of 2021, compared to N54.4 billion in 2020.