In the first quarter of 2023, Nigerian banks continued to use fintech, earning a total of N96.483 billion from their electronic enterprises.
From the N77.907 billion reported in the preceding quarter of 2022, this amounts to a 23.84% growth.
Regarding e-business revenue, United Bank for Africa Plc (UBA) and Access Holdings Plc were the top two earners. While Access Holdings made N20.664 billion, UBA made N20.929 billion.
Zenith Bank Plc, FirstBank Nigeria Limited, and Guaranty Trust Bank Plc were some of the other top earners.
The rise in popularity of mobile and online banking in Nigeria was the primary factor driving the development in e-business income. Banks are witnessing a corresponding rise in revenue as more and more consumers use these channels to receive financial services.
Nigerian banks also recorded good profit before tax of N446.722 billion in the first quarter of 2023, in addition to the surge in e-business income. From the N316.562 billion reported in the same time of 2022, this amounts to a 41.16% growth.
Revenue from electronic channels, card products, and related services are all included in e-business income. These channels include point-of-sale (POS) transactions, agency banking, internet banking, automated teller machines (ATMs), mobile applications, USSD channels, and ATMs.
The expansion of e-business revenue is encouraging for the Nigerian banking industry. It demonstrates that banks are adjusting to customers’ shifting needs and are in a good position to profit from the expansion of the digital economy.
Fintech firms use technology to offer individuals and businesses financial services that are more practical, inexpensive, and accessible.
The expansion of financial inclusion is one of fintech’s most important effects.
By offering services that can be accessed through mobile phones, fintech companies can reach those who were previously underbanked or without access to a bank account.
As a result, there are now much more people in Nigeria who have access to financial services.
The expansion of financial transactions is another effect of fintech. People may now make payments, send money, and invest their money with greater ease and convenience thanks to fintech companies. This has caused the number of financial transactions in Nigeria to significantly increase.
Another prominent effect has been the entrance of telecoms into the financial services industry. Since traditional banks are frequently absent in rural areas, telecom companies have the infrastructure to reach these residents. More people in rural areas can now access banking services thanks to this.
Bank operations are being impacted by fintech as well. Banks are using fintech solutions more frequently to increase productivity and lower expenses.
Due to their increased ability to charge commissions and fees, banks have seen an increase in non-interest income.
Tier-1 banks including UBA, Access Bank, and Zenith Bank headed the list of banks with the largest e-business income in FY 2022, according to analysis of data gathered from the financial statements of twelve listed banks.
In contrast to N66.568 billion in 2022, these banks recorded a combined total of N82.973 billion from an electronic business. This amount accounts for 86% of the N96.483 billion in total revenue generated in the first quarter of 2023.
The banks also reported a pretax profit of N359.767 billion in the first quarter, a 33.82% rise from the N268.837 billion reported in Q1 2022. Also included in the sum is 80.53% of the banks’ overall pre-tax profits.
GTCO Holdings: N11,425,000,000
GTCO Holdings recorded a rise of 61.78% in e-business revenue from the same period last year, from N7.062 billion to N11.425 billion, or N11.425 billion.
The holding company was responsible for 11.84% of the total revenue from electronic banking that the twelve banks generated.
For the first quarter ended March 2023, Q1’2023, Guaranty Trust Holding Company (GTCO) reported a 36.5% increase in profit before tax to N74.1 billion from N54.3 billion in the same time the previous year, Q1’2022.
The Group’s loan book (net) fell by 1.5% to N1.86 trillion in March 2023 from N1.88 trillion recorded as at December 2022, according to the unaudited consolidated and separate financial statements it released to the Nigerian Exchange Limited, NGX, and London Stock Exchange (LSE), while deposit liabilities rose by 9.9% from N4.61 trillion in December 2022 to N5.07 trillion in March 2023.
Zenith Bank – N12.079 billion
In the first quarter of 2022, Zenith Bank Plc reported an e-business income of N12.079 billion, a decline of 18.28% from the N14.784 billion reported in the similar period of 2022.
The bank with the highest capitalization on the NGX was responsible for 12.52% of all e-business revenue generated by the twelve banks.
According to Zenith Bank Plc, its total earnings increased by 41% in the first quarter of 2023, rising to N270 billion from N191.5 billion.
According to the unaudited statement of accounts provided to the Nigerian Exchange Group, Zenith Bank’s profit before tax increased by 27% year over year to N86.6 billion in Q1 2023 from N68 billion in Q1 2022.
During the comparative periods, profit after tax rose 13%, from N58.2 billion to N66 billion.
The bank claims that an increase in both interest revenue and non-interest income was the driving force behind the top line’s expansion.
From N126.4 billion in Q1 2022 to N191.6 billion in Q1 2023, Zenith Bank’s interest income increased by 52%.
In the same vein, non-interest income rose from N57.2 billion during the examined period to N72.8 billion, an increase of 27%.
FBNH– N17.876 billion
First Bank’s e-business revenue increased by 46.64% in the first quarter of 2023, from N12.190 billion in 2022 to N17.876 billion.
However, 18.53% of the total e-business revenue collected came from the bank.
The profit before tax (PBT) for the first quarter (Q1) of 2023 for FBN Holdings Plc increased from the N36.518 billion recorded in 2022 to N56.105 billion. This is an increase of 53.64%.
Profit after tax (PAT) was N50.054 billion for the first quarter that ended on March 31, 2023, compared to N32.401 billion the previous year, showing an identical 54.48% growth.
Access Holdings – N20.664 billion
The largest commercial bank in Nigeria, Access Holdings Plc, generated N20.664 billion from its electronic operations, or 21.42% of the total revenue produced by the twelve banks under review.
When compared to the N20.127 billion revenue figure from the prior year, its e-business income increased by 2.67% quarter over quarter.
Access Holdings increased Interest income by 46.4% to N254.22 billion in Q1, 2023 from N173.688 billion in the same period of 2022, according to its unaudited Q1 results, which the group published at NGX Exchange. Profits before taxes also climbed by 28.4%, from N65,559 billion during the review period to N81,594 billion.
Its profit after tax increased in the first quarter of 2023 from the N57.825 billion it earned in the corresponding period of 2022 to N71.636 billion.
As of the end of March 2023, Access Corporation’s total assets were N15.742 trillion, up from N14.998 trillion at the end of December 2022.
UBA – N20.929 billion
When compared to the N15.110 billion reported in the first quarter of 2022, the Pan African bank’s e-business income for the first quarter of 2023 was N20.929 billion, an increase of 38.5%.
The bank was responsible for 21.69% of the eleven banks’ combined e-business revenue.
While interest income, which was N125.9 billion as of March 2022, increased by 53.4% to N191.9 billion in the quarter under examination, the Group’s gross earnings increased by 47.5%, from N183.9 billion to N271.2 billion.
According to the findings, operating income increased by 39.6% to N175.7 billion from N125.9 billion in the same quarter of 2022.
In Q1 2023, UBA’s profit before tax increased dramatically by 38.25% to N61.4 billion from N44.5 billion in Q1 2022.
The company’s earnings after tax increased significantly, by a whopping 29.1%, from N41.5 billion to N53.6 billion, according to the statement.
Others include
FCMB – N6.575 billion
Union Bank – N1.967 billion
Wema Bank – N1.523 billion
Unity Bank- N1.288 billion
Stanbic IBTC – N958 million
Fidelity Bank- N955 million
Jaiz Bank – N244 million
The development of fintech in Nigeria poses a serious threat to conventional banks. The capacity of fintech companies to provide mobile banking services is one of the major dangers these businesses face. Nigerians increasingly use mobile banking to get financial services since it makes it possible for them to do so from their cell phones. Fintech companies benefit greatly from this as they do not have to pay the same infrastructure costs as banks.
The attention that fintech companies place on the client experience is another danger. Technology is being used by fintech companies to give their clients a more individualized and convenient experience. Banks have historically battled with this since they have been sluggish to adopt new technology.
Nigerian banks must change to keep up with the development of fintech. This entails increasing their technical infrastructure, creating fresh digital goods and services, and expanding their capabilities for online and mobile banking. To safeguard the information of their consumers, banks will also need to make cybersecurity investments.
A combination of traditional and digital banking is most likely what Nigerian banking will look like in the future. Successful banks will be those who can adjust to the shifting market and provide the best of both worlds.
