Nigerian banks report N192 billion earnings from digital transactions in H1 2023

Banks are increasing their investments in infrastructure, with a particular emphasis on fintech

Nigerian banks have continued to embrace digital innovations in the first half of 2023, resulting in a revenue of N192.010 billion from electronic transactions. This represents a significant 20.32% increase compared to the N159.577 billion earned in the same period in 2022.

Apart from the surge in e-business revenue, these Nigerian banks have disclosed strong pre-tax earnings of N1.665 trillion during H1 2023. This reflects a 132% increase compared to the N716.943 billion recorded in the same period of 2022. This boost in e-business revenue underscores the growing adoption of fintech solutions in Nigeria, despite challenges like the Central Bank of Nigeria’s currency redesign and cash swap in Q1 2023.

Fintech’s undeniable impact is transforming Nigeria’s financial services sector, making financial services more accessible, convenient, and affordable for both individuals and businesses. Banks are increasing their investments in infrastructure, with a particular emphasis on fintech, to improve their services and meet the rising demand for digital financial solutions and financial inclusion.

The rise in e-business revenue directly mirrors the increasing adoption of mobile and online banking in Nigeria, demonstrating the sector’s ability to adapt to changing customer preferences and thrive in the digital economy.

Additionally, e-business income covers profits derived from electronic channels, card products, and related services, such as mobile apps, USSD channels, ATMs, agency banking, internet banking, and POS payments. This increase is a favourable sign for Nigeria’s banking industry, establishing it as a significant recipient of the digital economy’s expansion.

Read More: Moniepoint personal banking app says all we need to know about the future of fintech

Analysis of H1 2023 E-Business Performance in Nigerian Banks

In the first half of 2023, top-tier banks in Nigeria, comprising UBA, Access Bank, First Bank, GT Bank, and Zenith Bank, dominated the landscape of e-business income. Collectively, they amassed a substantial N172.524 billion, accounting for an impressive 89.85% of the total earnings of N192.010 billion. This figure marked a significant increase from the N143.931 billion they earned in 2022,

black-profit before tax, red-profit after tax

Notably, these leading banks also reported remarkable pre-tax profits of N1.104 trillion in H1, reflecting a 78.64% increase from H1 2022 where they recorded N618.557 billion. This means they contributed 66% of the total pre-tax profits among all banks.

GTCO Holdings – N21.216 billion
GTCO Holdings reported an e-business income of N21.216 billion during H1 2023, representing a 14.22% increase compared to the N18.574 billion generated in the same period the previous year. This accounted for 11.04% of the total income from electronic banking. The bank also reported a robust profit before tax (PBT) of N327.4 billion, signifying a remarkable 217.1% increase over the previous year. The group’s loan book expanded by 22.8%, and deposit liabilities grew by 37%, reflecting strong financial growth.

Zenith Bank – N22.270 billion
Zenith Bank Plc recorded an e-business income of N22.270 billion during H1 2023, although this represented a slight decrease of 9.6% compared to the N24.635 billion recorded in H1 2022. Nevertheless, Zenith Bank remained a significant player, accounting for 11.59% of the total e-business income among the eleven banks. The bank reported substantial growth in its gross earnings, with a 139% increase to N967.3 billion. This growth positively impacted the bottom line, as pre-tax profits grew by 169% year-on-year (YoY) to N350.4 billion in H1 2023.

FBNH– N34.014 billion
First Bank’s e-business revenue witnessed a robust growth of 33.19% in H1 2023, reaching N34.014 billion, compared to N25.537 billion in 2022. This accounted for 17.71% of the total e-business revenue among the eleven banks. FBN Holdings Plc declared a profit after tax of N206.3 billion for H1 2023, representing an impressive 213.8% increase from H1 2022. The bank also reported significant growth in gross earnings, interest income, and non-interest income.

Access Holdings – N43.948 billion
Access Holdings Plc, the largest commercial bank in Nigeria, generated N43.948 billion from its electronic business in H1 2023, accounting for 22.88% of the total earnings among the eleven banks. The bank’s e-business income grew by 13.09% during H1 2023, and it reported substantial year-on-year growth in gross earnings, profit before tax, and profit after tax. Access Holdings also experienced a notable 35% year-to-date growth in customer deposits, reflecting its strong performance.

UBA – N51.076 billion
UBA recorded an impressive N51.076 billion in e-business income during H1 2023, marking a substantial 40.61% increase compared to H1 2022’s N36.324 billion. UBA accounted for 26.60% of the total e-business income among the eleven banks. The bank reported a remarkable profit before tax of N404 billion, a significant increase of 371% compared to H1 2022, reflecting its robust financial performance and growth in operating income, gross earnings, and customer deposits.

In addition to these leading banks, several others, including FCMB, Sterling Financial Holdings, Wema Bank, Stanbic IBTC, Fidelity Bank, and Jaiz Bank, also contributed to the e-business income landscape, further showcasing the dynamic and competitive nature of Nigeria’s banking sector in the digital age.

The fintech revolution in financial services

Financial services companies are utilizing technology to transform financial services, enhancing accessibility, cost-efficiency, and convenience for individuals and businesses.

A vivid consequence of the fintech surge is the substantial expansion of financial inclusion. Fintech companies are bridging the financial divide for previously unbanked or underbanked populations through mobile-accessible services, significantly improving access to financial services across Nigeria.

The influence of fintech is seen in the significant increase in financial transaction volumes. Simplified payment processes, effortless money transfers, and improved investment opportunities have all contributed to a substantial rise in transaction volumes within Nigeria’s financial ecosystem.

Moreover, the involvement of telecom giants in financial services has magnified this impact, especially in rural areas where access to traditional banks is limited. These telecom companies are introducing crucial infrastructure to underserved regions, substantially expanding access to financial services.

Fintech innovations are reshaping the operational landscape of banks. As they strive for efficiency gains and cost reductions, banks are increasingly incorporating fintech solutions. This transition has triggered non-interest income, with an increase in revenue from commissions and fees, highlighting the transformative role of fintech in Nigeria’s financial sector.

Read More: HelpMum, Bankly among 17 finalists of UNDP-EU Growth Stage Impact Ventures Program

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