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Access Bank and FBN lead as Nigerian banks rake in 200 billion naira from e-commerce in 9M 2021 – Nairametrics

By on December 8, 2021 0


Access Bank, FBN, and UBA lead the list of banks in Nigeria with the highest revenues from e-commerce in the 9-month period of 2021. The twelve banks listed on the Nigerian Stock Exchange have grossed $ 200. , 45 billion naira from their e-business unit between January and September 2021.

This is according to data from the unaudited financial statements of various banks for the third quarter of 2021. Banks’ revenues from electronic banking services jumped 41.1% to 200.45 billion naira from 142.1 billion naira. naira recorded in the corresponding period of 2020.

Given the umbrella bank’s monetary stance of keeping interest rates low in order to encourage borrowing and stimulate the economy after the covid-19-induced recession the previous year, commercial banks had to step up their efforts to increase the income of other production units.

This is evidenced by the significant growth recorded in their e-business revenues, which helped cushion the effect of lower interest income on their bottom line.

In our usual way of analyzing the performance of banks in Nigeria, Nairametrics presents the most profitable banks from their various ecommerce units. The list was dominated by the country’s five top-tier banks, commonly known as FUGAZ.

GTCo – N16.67 billion

The newly restructured bank, GTCo, generated N16.67 in e-commerce revenue between January and September 2021, which is an increase of 91.1% from the N8.21 billion recorded l ‘last year.

GTCo recorded the largest increase in e-commerce revenue and was able to close some gap as interest income from the previous year fell 12.5% ​​to $ 195.04 billion. nairas at 9M 2021.

Zenith Bank – 23.99 billion naira

Zenith Bank increased its e-commerce revenue by 29.9%, from N18.46 billion registered in 2020 to N23.99 billion during the period under review. On the other hand, its interest income fell slightly by 3.1% to 308.88 billion naira against 318.82 billion naira recorded the previous year.

UBA – 41.9 billion naira

United Bank for Africa was third on the list with N41.91 billion in e-commerce revenue, which is an increase of 50.4% from the N27.87 billion recorded in the corresponding period. from 2020.

Likewise, its after-tax profit rose 35.6% to 104.6 billion naira with interest income to 343.7 billion naira in the 9 months of 2021, an increase of 8.4%.

FBN Holdings – 42.02 billion naira

First Bank increased its e-commerce revenue by 21.5%, from 34.6 billion naira generated in the 9 months of 2020 to 42.02 billion naira during the period under review. Despite being one of the oldest banks in the country, First Bank has been at the forefront of the mobile banking revolution.

The bank was one of the pioneers of the USSD platform which allows money to be transferred through a text messaging application on a mobile phone. Despite the growth in e-commerce revenue, FBN recorded a 24.8% drop in after-tax profit, largely affected by a 12.6% drop in interest income from the previous year.

Access bank – N46.25 billion

Nigeria’s largest bank in terms of customer base and total assets, generated naira 46.25 billion through e-commerce in the 9-month period ended September 2021. That’s 60.6 billion % more than the 28.8 billion naira recorded in the comparable period of 2020.

Similarly, its after-tax profit improved 19.1% to N121.9 billion, from N102.3 billion printed in 9 months 2020. A quick review of the financial situation shows that Access Bank increased its total assets by 19.6%. to N 10.37 trillion compared to N 8.67 trillion recorded at the start of the year.

Why the surge?

Nigeria has seen a huge boom in electronic banking as the growing adoption of mobile phones and viral social media activity results in massive data consumption and spending across multiple channels.

  • The banking industry is also benefiting massively from the wave of adoption of cellphones, which are proving to be easy-to-use, secure banking apps that seemingly function as social media apps.
  • As the central bank maintained its monetary position, leaving the monetary policy rate (MPR) at 11.5%, which means potentially lower interest income for banks, banks must now look to other generating units. viable income.
  • Meanwhile, the fintech space continues to attract significant investment with more and more fintech and telecommunications companies offering more financial services. For example, the Central Bank of Nigeria (CBN) granted MTN and Airtel “approval in principle” to operate as payment services banks.
  • It is relevant to note that electronic banking income is generated by various digital transactions used by customers of a bank. Revenue is generated from fees and commissions earned through transactions such as mobile apps, automated teller machines (ATMs), USSD channels, online banking, point-of-sale (POS) payments, and banking services by agency.

Note: This analysis excludes the cost of producing income. The ranking will be significantly different if the expenses incurred to earn the income are net.