Eleven banks in the country raked in N279.85bn in the first nine months of 2023, an analysis of their financial reports has shown.
In comparison to the corresponding period of 2022, there has been a 29.89% increase from the recorded value of N215.44bn, which indicates a significant rise in electronic banking activities.
The Central Bank of Nigeria’s naira redesign policy has led to an increase in cashless transactions this year.
The policy forced many Nigerians to embrace electronic forms of payment, leading to a spike in the volume of cashless transactions.
Total cashless transactions grew by 44.84 per cent to N126.73tn in the first quarter of 2023 from N87.49tn in the corresponding period of 2022.
While the policy has been put on hold, banks are still benefitting from the rise in fees from e-banking channels as Nigerians retain their adoption of electronic payment channels.
United Bank for Africa earned the highest from electronic fees, raking in Plc N75.75bn during this period, while Jaiz Bank made N696.03m, emerging as the lowest earner, though it was a 78.55 per cent rise from N389.82m in the prior year.
In the period under review, Wema Bank Plc grew its e-banking earnings by 104.17 per cent to N5.21bn from N2.55bn.
Unity Bank Plc’s earnings declined by 18.44 per cent to N2.22bn from N2.72bn and Zenith Bank’s earnings declined by 6.98 per cent to N33.55bn from N36.07bn.
Fidelity Bank Plc’s electronic banking channel fee rose by 26.92 per cent to N2.85bn from N2.24bn.
United Bank for Africa grew earnings from e-channels by 57.95 per cent to N75.75bn, while Access Holdings Plc revenue from this stream increased by 42.412 per cent to N70.35bn.
Guaranty Trust Holding Company and its subsidiaries made N30.91bn from e-banking fees, a 14.70 per cent increase from the N26.95bn it made in the corresponding period of 2022.
FBN Holdings earnings increased by 22.04 per cent to N48.79bn from N39.98bn, Sterling Financial Holdings Company Plc and Subsidiaries earnings increased to N6.30bn from N5.57bn, and Stanbic IBTC Holdings Plc earnings jumped to N3.24bn from N1.63bn.
Banks are expected to continue to rake in more than modest fees from electronic banking channels.
The CBN recently predicted that the use of cash payments would be reduced in the country by 2025.
The government is also positioning itself to benefit from this surge in e-banking activities.
It expects to earn N584.18bn from the Electronic Money Transfer levy between 2024 and 2026, a N50 levy on electronic transfers, due to increasing transaction volumes.
In its 2024-26 Medium-Term Expenditure Framework and Fiscal Strategy Paper, the government said, “The Electronic Money Transfer levy will continue to be implemented in the medium-term.
“Compliance with the approved regulations governing the administration of the levy will be enforced to significantly improve collections over the medium term. Estimates were based on the projected volume of eligible online transfer transactions of 2.7 trillion in 2024, 3.1 trillion in 2025, and 3.8 trillion in 2026.”
This aligns with the CBN’s prediction in its Payments Vision 2025 document. The apex bank said, “The use of cash will naturally slow with the ‘mobile first generation’, which will be economically active by 2025, hence one of the focuses of the PSV 2025 is enhancing the cashless policy of the CBN.
“As we implement the PSV 2025 agenda, the CBN will continue to ensure that the Nigerian payments system is widely utilised domestically, supports the government’s financial inclusion objectives, and meets international standards while contributing to overall national economic growth and development of Nigeria.”
Despite recent strides in the payment space, there have been concerns about the country’s payment infrastructure capacity to enable these increased volume predictions, especially after its well-documented failure in the early parts of 2023.
In the first quarter of 2023, the House of Representatives urged the CBN to direct banks to overhaul their electronic transaction platforms in the aftermath of the cashless policy, which put pressure on online and electronic banking.
