….UBA, Access tops list
Nigerian banks have generated a total revenue of N96.483 billion from their leverage on fintech in the first quarter of 2023,
The money was generated from their electronic businesses.
This represents a 23.84% increase from the N77.907 billion recorded in the previous quarter of 2022.
Top performing banks in terms of e-business income
The top two earners, in terms of e-business income, were United Bank for Africa Plc (UBA) and Access Holdings Plc. UBA generating N20.929 billion while Access Holdings earned N20.664 billion.
Other top earners included Zenith Bank Plc, FirstBank Nigeria Limited, and Guaranty Trust Bank Plc.
The growth in e-business income was driven by the increasing popularity of mobile and online banking in Nigeria. As more and more people use these channels to access financial services, banks are seeing a corresponding increase in revenue.
In addition to the growth in e-business income, Nigerian banks also reported strong profit before tax of N446.722 billion in the first quarter of 2023. This represents a 41.16% increase from the N316.562 billion recorded in the same period of 2022.
E-business income includes revenue from electronic channels, card products, and related services. These channels include mobile applications, USSD channels, automated teller machines (ATMs), agency banking, internet banking, and point of sales (POS) payments.
The growth in e-business income is a positive sign for the Nigerian banking sector. It shows that banks are adapting to the changing needs of customers and are well-positioned to benefit from the growth of the digital economy.
The Impact of Fintech on the Financial Services Landscape
Fintech companies are using technology to provide financial services that are more convenient, affordable, and accessible to consumers and businesses.
One of the most significant impacts of fintech is the increase in financial inclusion.
Fintech companies can reach people who were previously unbanked or underbanked by providing services that can be accessed through mobile phones.
This has led to a significant increase in the number of people who have access to financial services in Nigeria.
Another impact of fintech is the growth in the volume of financial transactions. Fintech companies have made it easier and more convenient for people to make payments, transfer money, and invest their money. This has led to a significant increase in the volume of financial transactions in Nigeria.
The entrance of telecoms into the financial services sector has also had a significant impact. Telecom companies have the infrastructure to reach people in rural areas, where traditional banks are often not present. This has made it possible for more people in rural areas to access financial services.
Fintech is also having an impact on the way that banks operate. Banks are increasingly using fintech solutions to improve their efficiency and reduce their costs.
This has led to an increase in non-interest income for banks, as they can generate more revenue from commissions and fees.
More details on the banks’ e-business performance in Q1 2023
Analysis of data collated from the financial statements of twelve listed banks shows that tier-1 banks such as UBA, Access Bank, and Zenith Bank led the list of banks with the highest e-business income in FY 2022.
These banks recorded a combined sum of N82.973 billion from electronic business as against N66.568 billion in 2022. This sum represents 86% of the total sum of N96.483 billion generated in Q1 2023.
Also, the banks recorded a pretax profit of N359.767 billion in the first quarter, an increase of 33.82% from the N268.837 billion posted in Q1 2022. The amount also accounts for 80.53% of the total pretax profits recorded by the banks.
GTCO Holdings – N11.425 billion
GTCO Holdings reported an e-business income of N11.425 billion, representing an increase of 61.78%, compared to N7.062 billion generated in the equivalent period the previous year.
Zenith Bank – N12.079 billion
Zenith Bank Plc posted an e-business income of N12.079 billion during the first quarter of 2022, a decrease of 18.28% compared to N14.784 billion recorded in the corresponding period of 2022.
FBNH– N17.876 billion
First Bank’s e-business revenue grew by 46.64% in the first quarter of 2023 to stand at N17.876 billion from N12.190 billion recorded in 2022.
Access Holdings – N20.664 billion
Access Holdings Plc, which is the largest commercial bank in the country, generated N20.664 billion from its electronic business, accounting for 21.42% of the total amount generated by the twelve banks under consideration.
UBA – N20.929 billion
The Pan African bank recorded a sum of N20.929 billion as e-business income during the first quarter of the year 2023, an increase of 38.5% compared to N15.110 billion recorded in the first quarter of 2022.
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 rise of fintech is a major challenge to traditional banks in Nigeria. One of the biggest threats posed by fintech firms is their ability to offer mobile banking services. Mobile banking is becoming increasingly popular in Nigeria, as it allows people to access financial services from their smartphones. This is a major advantage for fintech firms, as they do not have the same infrastructure costs as banks.
Another threat posed by fintech firms is their focus on customer experience. Fintech firms are using technology to create a more personalised and user-friendly experience for their customers. This is something that banks have traditionally struggled with, as they have been slow to adopt new technology.
