Banks listed on the floor of the Nigerian Exchange scooped a total of N36.04 billion from account maintenance charges in the first quarter of 2023. This is according to data extracted from the quarterly financial statements of listed commercial banks in the Nigerian stock market.
Zenith Bank, Access Bank and GTB led the list of banks in Nigeria with the highest income from current account maintenance in the period under review. The amount generated from account maintenance charges in Q1 2023, represents a 19.5% increase compared to N35.67 billion recorded in the corresponding period of 2022.
According to the Central Bank Of Africa the account maintenance fee are charged on 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.
Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income. According to the directive by the CBN on bank charges, Nigerian banks are allowed to charge their customers a “negotiable” N1 per mille.
What this means is that banks can charge N1 per N1000 debit transactions on current accounts. Banks’ account maintenance charges come in the form of COT (i.e., Commission on Turnover) which is a charge levied on customer withdrawals by their banks.
Below is a ranking of Nigerian commercial banks based on their account maintenance earnings in the first quarter of 2023.
1. Zenith Bank – N21.02 billion
Zenith Bank is a very interesting bank. It was founded in 1990 and has since grown to become one of the largest and most respected banks in Nigeria. The bank is known for its innovation, especially in the areas of mobile and online banking. It was the first bank in Nigeria to launch an internet banking service, and it has continued to invest in technology to improve its services. The bank has a strong focus on customer service, and it has won several awards for its customer-centric approach.
Zenith Bank seats comfortably in top position having generated a sum of N9.27 billion from account maintenance, representing 25.7% of the total income by the 12 banks. Zenith Bank increased its account maintenance income by 17.6% compared to N7.88 billion that was made in Q1 2021.
Similarly, the tier-1 giant printed a year-on-year 9.7% increase in its profit after tax to N58.19 billion compared to N53.06 billion recorded in the corresponding period of 2021. In comparison to other listed banks, Zenith Bank recorded the highest net profit, representing 21% of the total N275.7 billion recorded by the industry in the period under review.
2. Access Bank – N13.363 billion
Access Bank is another large and well-respected bank in Nigeria. It was founded in 1989 and has since grown to become one of the leading banks in the country. Access Bank is known for its strong financial performance, its commitment to corporate social responsibility, and its innovative products and services. The bank has a strong focus on digital banking, and it has made significant investments in technology to improve its services.
Access Bank, the largest financial institution in the country by customer base and total asset value, with a total asset of N12.08 trillion, recorded a 16.2% year-on-year increase in its account maintenance income in Q1 2022 to stand at N6.04 billion from N5.2 billion.
In a similar fashion, the newly restructured bank grew its profit after tax to N57.39 billion from last year’s figure of N52.55 billion, representing a 9.2% year-on-year increase.
3. GT Bank – N10.481 billion
GT Bank, also known as Guaranty Trust Bank, is a leading financial institution in Nigeria and West Africa. The bank was founded in 1991 and has since grown to become one of the most respected and innovative banks in the region. GT Bank is known for its excellent customer service, its investment in technology, and its strong financial performance. The bank has a strong focus on sustainability, and it has won several awards for its efforts in this area.
GT Bank generated a sum of N5.17 billion from account maintenance income between January and March 2022. This represents a 23.8% increase compared to N4.18 billion recorded in the corresponding period of 2021.
However, its net profit dropped by 5.1% compared to N45.55 billion recorded as of the same period in the previous year to stand at N43.21 billion.
4. UBA – N9.64 billion
UBA, or United Bank for Africa, is a leading financial institution in Africa with a presence in 19 countries across the continent. The bank was founded in 1949 and has since grown to become one of the largest banks in Africa. UBA is known for its strong focus on innovation and its commitment to financial inclusion. The bank has a number of innovative products and services, including mobile banking and microfinance services.
United Bank for Africa came fifth on the list with N3.92 billion revenue from account maintenance, which is 24.5% higher than N3.15 billion recorded in the corresponding period of 2021.
The pan African bank’s account maintenance income accounts for 10.9% of the total N36.04 billion recorded by the 12 banks under consideration. In terms of the bottom line, UBA grew its profit after tax by 8.8% year-on-year to N41.49 billion in the review period.
5. First Bank – N5.19 billion
First Bank is a legendary institution in Nigeria, having been founded in 1894 as the Bank of British West Africa. The bank was renamed First Bank of Nigeria in 1979, and it is now one of the largest banks in Africa. First Bank is known for its stability and its commitment to customer service. The bank has a large network of branches and ATMs throughout the country, and it offers a wide range of products and services.
First Bank of Nigeria saw its account maintenance income increase marginally by 2.2% from N4.05 billion generated in Q1 2021 to N4.14 billion in the same period of 2022. It accounted for 11.5% of the total account maintenance income of the industry.
First Bank’s profit after tax increased significantly by 107.7% year-on-year to N32.4 billion in Q1 2022 from N15.59 billion posted in the previous year.
Others
- Stanbic IBTC – N2.643 billion
- Sterling Bank – N2.392 billion
- Fidelity Bank – N1.769 billion
- Wema Bank – N1.636 million
- Unity Bank – N745 million
