In the initial nine months of 2023, Nigerian banks continued to harness the power of fintech, reporting a substantial total revenue of N265.269 billion from their electronic businesses. This marked a significant uptick of 24.42% compared to the N213.204 billion recorded in the corresponding period of 2022. This financial surge underscores the evolving landscape of the Nigerian financial sector, with leading institutions embracing digital transformation to enhance their service offerings.
The standout performers in terms of e-business income during this period were Access Holdings Plc and United Bank for Africa Plc (UBA), contributing N70.350 billion and N61.161 billion, respectively. FBNH, Zenith Bank Plc, and GTCO also secured noteworthy spots among the top earners, reflecting the diverse spectrum of financial institutions actively participating in the digital evolution.
Beyond the surge in e-business income, these banks collectively reported a robust profit before tax of N2.339 trillion in the first nine months of 2023. This impressive figure represents a staggering 160% increase from the N899.925 billion reported in the same period of the preceding year. Such substantial profit growth indicates not only the increasing reliance on fintech solutions but also the adaptability of Nigerian banks to the changing demands of the digital economy.
The flourishing e-business income is indicative of the rising popularity of mobile and online banking in Nigeria. As these channels become more integral to individuals and businesses for accessing financial services, banks are witnessing a proportional increase in revenue. The umbrella term “e-business income” encompasses revenue derived from electronic channels, card products, and related services, including mobile applications, USSD channels, ATMs, agency banking, internet banking, and POS payments.
The profound impact of fintech on the Nigerian financial services landscape is undeniable. Fintech companies are leveraging technology to provide financial services that are not only more convenient and affordable but also highly accessible to a broader spectrum of consumers and businesses. One of the noteworthy outcomes is the significant increase in financial inclusion, reaching individuals who were previously unbanked or underbanked through services accessible via mobile phones.
Moreover, the volume of financial transactions has experienced substantial growth, thanks to fintech companies facilitating easier and more convenient payments, money transfers, and investment opportunities. The involvement of telecom companies in the financial services sector has further widened the reach, particularly in rural areas where traditional banks may be less prevalent.
Banks, in response to these shifts, are making substantial investments in fintech to enhance their product and service portfolios. The resultant increase in non-interest income, driven by additional revenue from commissions and fees, showcases the strategic integration of fintech solutions to improve efficiency and reduce operational costs for these financial institutions.
A comprehensive analysis of e-business performance over nine months, conducted by Infostride News from the financial statements of eleven listed banks, reveals the dominance of tier-1 banks such as UBA, Access Bank, First Bank, GT Bank, and Zenith Bank. Collectively, these banks recorded N244.757 billion from electronic business, constituting a significant 92.26% of the total N265.269 billion generated in the same period.
GTCO Holdings, contributing N30.906 billion, accounted for 11.65% of the total income generated by the eleven banks. The parent group of GT Bank also reported a notable profit before tax of N433.2 billion, marking a remarkable year-on-year increase of 155.2%. Zenith Bank, with an e-business income of N33.551 billion, led the pack in total profit before tax, reporting N505 billion in the first nine months of 2023.
First Bank’s e-business revenue grew by 22.04% to N48.789 billion, constituting 18.39% of the total e-business revenue. The bank’s profit before tax soared by 156.3% to N270.3 billion, driven by robust growth in interest income. UBA recorded an impressive e-business income of N61.161 billion, accounting for 23.06% of the total, while reporting a profit before tax of N502.1 billion, a notable year-on-year increase of 262.5%.
Access Holdings Plc, as the largest commercial bank, generated N70.350 billion from its electronic business, reflecting a substantial 42.41% increase from the previous year. This accounted for 26.52% of the total income generated by the eleven banks. Access Holdings reported a commendable nine-month pre-tax profit of N294.4 billion, a robust year-on-year increase of 100.2%.
Other noteworthy contributors to the e-business income include Sterling Financial Holdings (N6.304 billion), Wema Bank (N5.207 billion), Stanbic IBTC (N3.242 billion), Fidelity Bank (N2.848 billion), Unity Bank (N2.215 billion), and Jaiz Bank (N696 million).
In conclusion, the surge in e-business income and the parallel growth in profit before tax among Nigerian banks highlight the sector’s resilience and proactive approach in adapting to the evolving fintech landscape. As these financial institutions continue to invest in and leverage technology, the trajectory suggests a sustained positive impact on revenue streams and operational efficiency, further solidifying their role in the digital economy. Infostride News will continue to monitor and report on these transformative trends shaping the Nigerian banking sector.
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