Seven Nigerian Banks Post N403.6bn Profits Through Fees, Commissions

…As customers groan in pains

Some commercial banks operating in Nigeria namely Access Bank Plc, Zenith Bank Plc, Stanbic IBTC Holdings Plc, Guaranty Trust Bank Limited, United Bank of Africa Plc, Fidelity Bank Plc and Union Bank of Nigeria Plc generated N403.6 billion in nine months in 2021.

The Central Bank of Nigeria’s ‘Guide for Charges by Banks, other Financial and Non-Bank Financial Institutions Current Account Maintenance Fee’, CAMF is only applicable to current accounts in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank.

The apex bank clearly states that CAMF is not applicable to savings accounts and is negotiable subject to a maximum of N1 per mile.

It was based on this that the CBN on January 1, 2020, introduced a new regime for bank charges that affected mainly card maintenance fees, charge for hardware tokens and electronic transfers.

The CBN stated; “Card maintenance fee on current account has been removed as the accounts already attract account maintenance fee. Savings accounts will now attract card maintenance fee of N50 per quarter from N50 per month”.

However, the charges by the banks seems to be far away from the CBN’s guidelines as customers seem to be bearing a burden they never bargained for.

Perusing through the financial statements of the banks showed that the figure in 2021 is higher by 24.7 per cent when compared with the N303.9bn recorded during the same period under review in 2020.

The figures represent deductions from fees and commissions which account for a significant percentage of non-interest income for banks representing income from account maintenance fees, electronic banking fees, and other credit-related commissions.

These were contained in the banks’ financial statements for the third quarter of 2021 indicating that net fee and commission income is the actual revenue generated from the charges after expenses incurred from providing the services have been deducted.

For instance, Access Bank net in a total of N88.9bn as against N71.8bn generated in 2020 just as the bank’s financial report equally showed that it made N16.2bn from account maintenance and handling commission while N46.3bn were from channels and other e-business fees.

Similarly, Zenith Bank made N65.1bn from fees and commissions showing a 47.2 percent higher than 2020 during which it generated N44.2bn.

A cursory look at the figures it presented showed that the bank raked in N24.2bn from current account maintenance alone and N23.9bn from fees on electronic products.

Equally, the UBA generated N110.9bn indicating a N25.9bn higher than the N85bn it made under same period in 2020 just as it made N7.1bn from account maintenance charges as well as N41.9bn from e-business fee.

The story was not different from Stanbic Bank whose net fee and commission charges of N60.9bn rose by 13.1 percent compare to the N52.9bn generated in 2020.

Its Financial statement showed that account maintenance fees accounted for N3.7bn while electronic banking charges was put at N2.5bn for fees and commission.

The records also indicated that GTB gathered N51.8bn between January and September from fees and commissions showing an increase of N19.1bn in the revenue it recorded covering the same period in 2020 just as the sum of N13.1bn was generated from account maintenance fees while e-business fees netted N15.6bn.

The story was similar with Union Bank that garnered N10.3bn from fees and commission in 2021 from account maintenance fees which recorded N1.7bn while electronic bank charges was put at N6.7bn.

In the same vein, Fidelity Bank raked in N15.7bn during the period under review compared to the N5.6bn it generated in 2020 as its financial statement showed that it made N2.8bn from accountant maintenance fees and N6.7bn from e-business fees.

The CBN in a circular dated December 20, 2019, placed N2,500 as the maximum cost for a hardware token just as directed that bills payment including payment through other e-channels should cost a maximum of N500 covering a wide range of costs for electronic funds transfer.