- E-banking revenue up by 66% as more customers embrace digital channels
Five Nigeria’s tier-one banks generated N431bn in e-business revenue in the first nine months of 2024, reflecting a 66.15 per cent increase from the N259.34bn recorded in the same period in 2023.
This surge, based on an analysis by The Point, highlights the impact of fintech adoption on the banking sector, as banks increasingly leverage digital solutions to meet the demand for online and mobile banking services.
The data, sourced from financial statements of major Nigerian banks, UBA, Access Holdings, FBNH Bank, GTCO, and Zenith Bank, revealed that United Bank for Africa and Access Holdings were the highest earners.
UBA recorded e-business revenue of N144.49bn, a 90.75 per cent increase from the previous year, while Access Holdings generated N121.13bn, up by 72.18 per cent.
This substantial growth in e-business revenue also aligned with strong profit margins. Combined, the banks reported a profit before tax of N3.43trn, a 97.3 per cent year-on-year increase from N1.74trn in 2023.
This performance underscores the rising demand for digital services across Nigeria as more customers turn to online and mobile platforms for financial transactions.
A bank-by-bank breakdown of e-Business revenue growth in 2024 showed that UBA led the tier-one banks in e-business income, achieving N144.49bn in revenue, which accounted for 33.53 per cent of the total e-business income.
The bank’s profit after tax also rose to N525.31bn, marking a 16.92 per cent increase over the same period in 2023.
Access Holdings Plc generated N121.13bn from its electronic business, a 72.18 per cent increase from N70.35bn generated a year earlier.
This accounted for 28.11 per cent of the total amount generated by the five banks under consideration. The group’s profit after tax of N457.75bn during the nine months was also an 82.77 per cent year-on-year increase from the same period in 2023.
Zenith Bank Plc posted an e-business income of N62.27bn during the first nine months of 2024, a decrease of 86.19 per cent compared to N33.55bn recorded in the corresponding period of 2023.
The most capitalized bank on the NGX, accounted for 14.45 per cent of the total e-business income by the eleven banks.
The group reported a profit after tax of N827.28bn during the nine months, an 90.45 per cent year-on-year increase from N434.17bn recorded the same period in 2023.
FBNH’s e-business revenue grew by 13.72 per cent in the nine months of 2024 to stand at N55.48bn from N48.79bn recorded in 2023. However, the bank’s e-business income accounted for 12.88 per cent of the e-business revenue captured.
According to the group’s financial statements for nine months, the company’s profit after tax was N533.88bn, a 125.82 per cent increase from the N236.42bn recorded in the corresponding period in 2023.
GTCO Holdings reported an e-business income of N47.54bn, representing an increase of 54.14 per cent, compared to N30.91bn generated in the equivalent period the previous year.
The holding company accounted for 11 per cent of the total income generated by the eleven banks from electronic banking.
The group also recorded a profit after tax of N1.085trn during the nine months, representing a year-on-year increase of 195.3 per cent from N367.42bn recorded in the corresponding period of last year.
The e-business earnings reported by these banks reflect a broader trend of digital transformation driven by fintech. Nigerian banks have increasingly invested in mobile applications, USSD codes, ATMs, internet banking, agency banking, and POS payments to capture the shift toward digital financial services.
Fintech solutions have not only improved accessibility and convenience for customers but have also enabled banks to streamline operations and boost non-interest income from transaction fees.
With growing financial inclusion as a key benefit, fintech is helping previously unbanked and underbanked individuals access financial services, especially in rural areas.
Telecommunications companies have also contributed to this shift, using their extensive reach to offer mobile banking options to communities with limited bank access.
This collaboration between telecoms and financial institutions has significantly boosted transaction volumes across the country, meeting the demand for digital payment and money transfer services.
As Nigerian banks continue to integrate fintech into their business models, they are positioned to capitalize on the country’s expanding digital economy.
The success of tier-one banks in generating e-business revenue and profit growth underscores the importance of fintech in driving sector-wide innovation and financial inclusion.
With a focus on customer-centric solutions and strategic partnerships, these banks are well-placed to maintain their growth trajectory in the evolving financial landscape.
Amid macroeconomic challenges facing the Nigerian economy, Zenith Bank Plc, Guaranty Trust Holding Company Plc, Access Holdings Plc, United Bank for Africa Plc (UBA), FBN Holdings Plc and Ecobank Transnational Incorporated generated an estimated N4.15 trillion profit before tax in the first nine months of 2024.
The said amount raked in by the financial institutions, was about 110.4 per cent increase, compared with the total of N1.97 trillion profit before tax generated by the banks in nine months of 2023.
The figures were compiled from the respective nine months unaudited financial statement of the financial institutions released to the investing public on the Nigerian Exchange Limited.
After paying an accumulative N789.88 billion income tax expenses in nine months of 2024, it was gathered that the six deposit money banks generated N3.91 trillion profit after tax in nine months of 2024, a growth of 104 per cent compared with the total of N1.92 trillion reported by the banks in nine months of 2023.
So far in 2024, these DMBs were faced with a range of challenges stemming from both domestic economic factors and global financial trends.
Notable challenges include currency volatility and foreign exchange shortages, double-digit inflation that is currently at 32.70per cent as at September 2024; rising interest rate and the restrictive monetary policy of the Central Bank of Nigeria; digital transformation and cybersecurity threats, and competition from Fintech and Mobile Money Operators.
These DMBs, however, leveraged on the interest rate hike by the CBN to drive interest income from loans and advances to customers, and interest from government securities.
Others challenges were power and infrastructure challenges; talent acquisition/retention and geopolitical and global economic factors.
Despite these challenges, DMBs operating in Nigeria and Sub-Saharan Countries in Africa have significantly driven profit before tax generation in the period under review.
For instance, GTCO, and Zenith Bank emerged the only DMBs with over N1 trillion profit before tax generation in nine months of 2024.
In the period under review, GTCO’s declared N1.21 trillion profit before tax, about 181.5 percent increase over N433.2billion generated in nine months of 2023, while Zenith Bank hit N1 trillion profit before tax in nine months of 2024, representing an increase of 99 per cent from N505.04 billion reported in nine months of 2023.
As ETI announced N708.54 billion profit before tax in nine months of 2024, a growth of 170 percent from N262.17billion in nine months of 2023, FBN Holdings declared N610.86 billion profit before tax in nine months of 2024, up by 128 per cent from N267.88 billion reported in nine months of 2024.
The CEO of Ecobank Group, Jeremy Awori, stated that the nine months of 2024 results highlighted the resilience and commitment of the Pan-African financial institution, even amid a challenging economic landscape that African governments actively address through fiscal and monetary policies.
“These results also exemplify our diversified business model’s strength and unwavering commitment to executing our Growth, Transformation, and Returns (GTR) strategy.
“We have made significant progress on our transformation agenda over the past three quarters. Our revenue and earnings growth expectations are built on strengthening our customer-centric business lines, allowing us to deliver the products and services our customers need.
“We are simplifying operations and developing new offerings.
Furthermore, we continue to invest in our technology platforms to maximise our potential. Hence, we have restructured our organisation to prioritise client focus, creating new opportunities to achieve our goals,” Awori added.
On his part, the Group Managing Director, FBN Holdings, Nnamdi Okonkwo, said the Holdings delivered a strong performance in the nine months of 2024, achieving significant growth driven by the effective execution of our strategic priorities.
“’Despite a challenging macroeconomic environment, our focus on operational efficiency, customer-centric innovations, and prudent risk management continues to generate sustainable value for our stakeholders,” he said.
Looking ahead, Okonkwo added that, “we remain focused on executing our digital transformation strategy, enhancing customer experience, and driving long-term growth.”
In addition, UBA’s profit before tax stood at N603.48billion in nine months of 2024, about 20.2 per cent increase from N502.09billion reported in nine months of 2023, while Access Holdings announced N558.18 billion profit before tax in nine months of 2024, a growth of nearly 90 per cent from N294.42billion reported in nine months of 2023.
The Group Managing Director/CEO, UBA, Oliver Alawuba, said the nine months 2024 performance was underpinned by consistent strong growth on all core and sustainable banking income lines.
He added that “Our substantial investments in technology are yielding tangible business value. This commitment is instrumental in delivering enhanced customer experiences and optimizing operational
efficiency.”
