Commercial banks in Nigeria have recorded a sharp increase in their earnings on customer fees income as account maintenance charges slammed on customers rise 43 percent Year-on-Year, YoY, to N75.5 in the first half of the year (H1’21).
This comes against a sharp rise in the income the banks generated from electronic banking (e-banking) services rendered to the customers during the period. The e-banking income rose by 51 percent to N113.84 billion from N75.26 billion in H1’20.
The banks which cut across the tier-1 and tier-2 categories include, First Bank, Guarantee Trust Bank (GTB), United Bank of Africa, UBA, Access Bank, Zenith Bank, First Bank of Nigeria, Fidelity Bank, First City Monument Bank, FCMB, Union Bank, Stanbic IBTC Bank, Unity Bank and Sterling Bank.
Findings from the bank’s half year financial statements showed that account maintenance fees paid by bank customers rose sharply by 43 percent to N75.5 billion in H1’21 from N52.94 billion in H1’20.
Sterling Bank had the highest growth rate in account maintenance fee, up by 75 per cent to N1.4 billion in H1’21 from N800 million in H1’20.
This was followed by UBA with 50 per cent rise to N5.4 billion from N3.6 billion in H1’20.
The bank with the least growth in account maintenance fee was FCMB recording N2.2 billion in H1’21, up 29 per cent from N1.7 billion in H1’20.
On e-banking income, the bank with the highest growth rate was Zenith Bank which recorded N17 billion, 91 per cent rise from N8.9 billion in H1’20.
However, Union Bank recorded a 3.3 percent decline to N3.54 billion from N3.66 billion in H1’21.
Commenting on the development, President, Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, attributed the growth in account maintenance fees and e-banking income to increased transactions by bank customers despite low income and slow business activities in H1’21.
He stated: “Several factors can make account maintenance fees grow. Like I said, it is a function of transaction. If transactions are increasing then the banks will have a reason to charge that fee. Remember what the name is account maintenance and there is a rate stipulated by the regulatory authorities that should be charged.
‘‘So those rates once they are maintained and they are growing it means that the customers are transacting more than whatever one would have thought of.
‘‘The only problem that you may have is that if it can be proven that the basis on which these fees are collected by the banks is not in line with the principles and regulatory requirements that guide the collection of the account maintenance fee.
“I think it will be for the regulators to find out why the cost or the fees are increasing even when suspiciously business is not moving, people are not transacting as much as they would have loved to in their banking activities. ‘‘These are all in the minds. Nobody knows what is happening in reality and that is why the authorities should be able to now take a look at that.
‘‘In fact, it should be something of concern to them that people are saying look, we are not having business, things that generate income for this kind of transaction, for this kind of charge to be growing. It should rather be coming down with what is happening in the economy. It will now be the duty of the regulator to find out or empower some people to carry out investigations.”