Guaranty Trust Bank Plc (GTBank) and Zenith Bank Plc, two of Nigeria’s biggest banks, have recorded a total of N377.6billion for the financial year ended December 31, 2018.
Details of the performance of the two banks showed that GTBank made a profit of N193 billion while Zenith Bank Plc achieved N184.6 billion for the fiscal year ended December 2018.
The banks were able to achieve this on the back of a rather slow economy, while most businesses struggled to grow topline revenues.
According to the National Bureau of Statistics(NBS), a major contributing factor to both companies’ revenues and bottom lines is the money they earned from their electronic products. Electronic products, for most banks, refers to income from online transfers and transactions using a mobile phone application and such others.
Specifically, in 2018, Earnings keep rising as Zenith Bank reported total fees of N20.4 billion from their electronic product, compared to N14.1 billion in 2017.
On the hand, GTBank generated a total of N9.5 billion in 2018 compared to N7.4 billion in 2017.
However, Zenith and GTBank fell behind the likes of FBNH and UBA in terms of earnings from the e-business market segment.
In the previous year, the five biggest banks in Nigeria — First Bank, UBA, GTBank, Access Bank, and Zenith Bank collectively referred to as FUGAZ — made a total of N68.1 billion from electronic fees. This was a 4.2 percent decline compared to the N71.7 billion achieved in 2017.
Meantime, an overview of Nigeria’s e-payment industry revealed that it is fast-growing, with billions of transactions taking place monthly.
According to data from the National Bureau of Statistics, Nigeria’s electronic payment market (which is made up P.O.S, mobile payments, internet web, and e-bills), has a transaction value of about N426 billion per month.
Consequently, Nigerian Banks see this as an area of incremental revenue and have invested billions in this segment of the financial services sector. The CBN has also played its part by pushing banks to support its financial inclusion policy.
Also, several Fintech startups have also made inroads into the financial services space as they all jostle for a growing industry with seemingly huge opportunities for everyone. Thus, a peep into the results of banks provides an idea into how huge the industry is. Fintech companies are also valued based on the potential fees they can earn from transactions.