Home Sectors BANKING & FINANCE H1.2022: 8 Banks Generate N234.97bn from Account Maintenance, Others

H1.2022: 8 Banks Generate N234.97bn from Account Maintenance, Others

Names Of Forex Policy Defaulters Will Be Published, Banks Tell Customers
Names Of Forex Policy Defaulters Will Be Published, Banks Tell Customers

In the first half (H1) of 2022, a total of eight Deposit Money Banks (DMBs) earned N234.97 billion for a variety of commissions, including fees associated with credit and electronic banking.

This is an increase of 14.7% from the N204.84 billion in fees and commissions these eight DMBs brought in during the first quarter of 2021. The eight banks include Wema Bank Plc, Jaiz Bank Plc, FCMB Group Plc, Sterling Bank Plc, Union Bank of Nigeria Plc, Unity Bank Plc, and Ecobank Transnational Incorporated (ETI).

According to a breakdown, ETI earned N112.21 billion ($269.1 million) in fees and commissions from clients, an increase of 21% from N92.84 billion ($228.58 million) in H1 2021. The pan-African bank in a recent presentation maintained that the increase in fees and commissions was driven by significantly higher spending on cards, cash management fees and credit-related fees responsible for a hike in fee and commission.

Another Tier-1 DMB, FBN Holdings reported N70.69billion fee and commission in H1 2022, representing an increase of 2.4 per cent from N69.08billion reported in H1 2021.

The Chief Executive Officer, of First Bank of Nigeria Limited, the banking subsidiary of FBN Holdings, Dr Adesola Adeduntan said the financial institution would continue to strengthen its dominant digital banking capabilities in the provision of best-in-class services to all segments of its customers across all footprint in sub-Sahara Africa and beyond.

Meanwhile, FCMB Group and Sterling Bank generated N22.07billion and N10.5billion as fee and commission income in H1 2022 from N16.62billion and N8.4billion generated in H1 2021, respectively.

FCMB Group in a presentation to investors/analysts stated: “Non-interest income also grew by 29 per cent Year-on-Year (YoY) largely driven by growth in service fees and commissions and trading income despite a decline in Foreign Exchange revenues. Trading income grew 132per cent YoY from higher volumes of fixed income instrument trades during the year.”

Electronic-banking commissions and current account maintenance fees are the most typical commissions that DMBs produce for non-interest income. Wema Bank increased its fee and commission by 39% to N7.5 billion in H1 2022 from N5.39 billion reported in H1 2021, whereas Union Bank of Nigeria reported N8.16 billion in fee and commission in H1 2022, a decrease of 8% from N8.83 billion in H1 2021.

Jaiz bank reported N662.8 million in fee and commission income in H1 2022, an increase of 2.6% from N646.0 million reported in H1 2021. Unity bank reported N3.2 billion fee and commission income in H1 2022 from N3.07 billion in H1 2021.

The Central Bank of Nigeria (CBN) in its guide to charges by banks, other financial and non-bank financial institutions” circular released in January 2022 stated that the Current Account Maintenance Fee (CAMF) applies to current accounts only in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank.

According to the circular, the CAMF does not apply to Savings Accounts and is negotiable subject to a maximum of N1 per mille. The apex bank defined CAMF as the monthly fee chargeable on current accounts based on the level of customer-induced debit transactions that occurred in the account during the month.

“This fee does not apply to all bank-induced debits and customer-induced transfers to other accounts in the same name and the same bank,” the CBN stated.

As regards Electronic Funds Transfer, the CBN fixed N50 for transactions done above N50, 000, N25 for N5, 000 – N50, 000 and N10 charge for below N5, 000.For instance, FBN Holdings in H1 2022 generated N25.5billion from electronic banking fees as against N28.82billion in H1 2021, while income from its account maintenance rose by 15 per cent to N9.1billion in H1 2022 from N7.93billion reported in H1 2021.

In the move, FCMB Group reported an increase of 53 per cent for maintaining customers’ current accounts to N3.4billion in H1 2022 from N2.2billion in H1 2021, while electronic fees and commissions closed H1 2022 at N6.69billion from N6.68billion in H1 2021.

In addition, Sterling Bank reported an increase of 37 per cent in its current account maintenance fee to N1.85billion in H1 2022 from N1.35billion in H1 2021. The bank’s E-business commission and fees rose by nine per cent to N3.9billion from N3.39billion reported in H1 2021.

Despite the competitive environment regarding CBN licensing more Fintech companies to operate in electronic-banking transactions, the eight DMBs have maintained stronger earnings from non-core banking operations.

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