Nigeria: Banks Generate N438bn from Digital Transactions in 2023

Banks Generate N438bn from Digital Transactions in 2023
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In 2023, ten Nigerian financial institutions collectively earned approximately N438 billion from digital banking channels, marking a 37.54% increase from the N318.64 billion generated in the previous year, according to an analysis of their annual reports.

E-business income, which encompasses revenue from electronic channels, card products, and related services, has seen substantial growth due to the rising popularity of mobile and online banking in Nigeria. These channels include mobile applications, USSD services, ATMs, agency banking, internet banking, point of sale (POS) payments, and credit and debit card transactions.

Leading the pack was United Bank for Africa (UBA), which reported N125.58 billion in revenue from electronic banking, up from N78.94 billion in 2022. However, UBA’s IT support and related expenses surged by 148% to N23.19 billion from N9.32 billion.

Access Holdings followed with an income of N101.62 billion from electronic business, reflecting a 70.34% increase from the previous year. Their IT and e-business expenses also rose to N78.05 billion from N44.63 billion in 2022.

FBN Holdings reported N66.34 billion in earnings from its electronic business, up from N55.09 billion in the previous year. The bank highlighted that electronic banking fees were a major contributor to the growth of its fees and commission income.

Zenith Bank recorded N51.82 billion in earnings from electronic banking fees in 2023, a 13.29% increase from N45.74 billion in the prior year. The bank’s IT expenditure also rose by 8.48% to N33.59 billion from N30.97 billion in 2022.

Guaranty Trust Holding Company (GTCO) saw its income from electronic business grow to N40.83 billion from N37.74 billion in the previous year, while its communications, administrative, and technological expenses increased to N50.24 billion from N42.39 billion.

FCMB Group earned N17.69 billion from electronic fees and commissions in 2023, up from N13.99 billion the previous year. The bank’s IT spending nearly doubled to N16.57 billion from N9.99 billion.

Fidelity Bank’s e-business earnings rose by about 20.30% to N14.03 billion from N11.66 billion in 2022. The bank significantly increased its IT spending in 2023 by 274.73% to N16.57 billion from N4.42 billion the previous year.

Sterling Financial Holdings Company reported N8.588 billion from e-business commissions and fees in 2023, higher than the N7.16 billion recorded in 2022.

Wema Bank, known for its pioneering digital bank ALAT, saw its fees from electronic products rise to N7.35 billion from N6.13 billion. Interestingly, its spending on technology and alternative channels declined by 1.84% to N1.42 billion.

Stanbic IBTC Holdings recorded the least income from electronic business among the reviewed banks, with N4.42 billion, up from N2.51 billion in 2022. In contrast, its IT expenditure rose to N19.34 billion, a 42.93% increase over the previous year.

The newly released Gross Domestic Product (GDP) figures indicate that the financial services sector continues to increase its contribution to the GDP. Analysts attribute this growth to the adoption of technology in the sector.

Dr. Afolabi Olowookere, Managing Director and Chief Economist at ADSR, explained “The sector is growing, hence its contribution to the GDP will also grow. After COVID-19, the financial sector and ICT have been growing because people do a lot of transactions online.”

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