Breaking News
Translate

Bank customers pay N138bn for alerts, others

…E-payments transactions fall by 11% in April

By Babajide Komolafe

Bank customers paid N138 billion as electronic payment charges in 2016 to the top ten banks in the country. This represented 26 per cent increase when compared to the N109.1 billion paid to the banks in 2015.

The charges, as stipulated in the Guide to Bank Charges of the Central Bank of Nigeria (CBN) include:    ATM card issuance, replacement and renewal charges; Hardware token and soft token issuance charges; ATM withdrawal charges; Funds transfer charges; bulk payments such as salary; and SMS alerts.

Commenting on this development, President, Bank Customers Association of Nigeria (BCAN), Mr. Oju Ogubunka said that: “The hiked cost will impact negatively on wider adoption of e-payments in the country. Banks, at the detriment of consumers, will further enrich themselves. Non e-payment channels that are cheaper are likely to witness higher patronage with some obvious implications.”

Graphical interpretation

Meanwhile, the phenomenal growth in e-payment transactions recorded in March was reversed in April, with 11 per cent decline. The decline was      driven by slow down in Mobile, Instant transfer, and Electronic funds transfer transactions.

Boom in e-payment

The banking industry enjoyed  boom in epayment business in 2016. Statistics from the Central Bank of Nigeria (CBN) showed that the volume and value of epayment transactions in 2016 shot up by 132 per cent and 82 per cent respectively, to 942 million transactions worth N71 trillion.

As a result the top ten banks were able to increase income from charges paid by customers on the e-payment transactions  by 26 per cent to N137.9 billion in 2016, from N109.1 billion in 2015.

The banks are Access Bank, Diamond Bank, FCMB, FBN Holdings, Fidelity Bank, GTBank, Stanbic IBTC, UBA, Union Bank and Zenith Bank.

Analysis of the 2016 financial statements of the banks show that the e-payment income recorded by the banks accounted for 30 per cent of their total income from fees and commission of N467.4 billion in 2016. This indicates slight increase when compared with 29 per cent achieved in 2015, when e-payment income hit N109.1 billion on a total fees and commission of N393.1 billion.

Tier-1 Vs Tier-2 banks

Further analysis reveal that Tier-1 banks, occupying the top five positions in size metrics of the Nigerian banking industry, dominated income flow from e-payment charges, as they accounted for 68 per cent of e-payment income of the 10 banks in 2016 (slightly up from 67 percent in 2015).

The top five banks are Access, GTBank, FBN Holdings, UBA and Zenith Bank.

The five banks collectively increased their e-payment income by 29 per cent from N72.89 billion in 2015 to N94.4 billion in 2016.

Smaller banks advance

However, as percentage of total income from fees and commission earned by the five banks, e-payment income dropped to 37 per cent in 2016 from 38 per cent in 2015.

On the other hand, though the e-payment income of T-2 banks increased by 26 per cent from N36.2 billion in 2015 to N43.47 billion in 2016, their share in the top 10 banks’ e-payment income  dropped slightly to 28 per cent from 29 per cent in 2015. But the share of epayment income in total income from fees and commission for the Tier 2 banks remained stable at 30 per cent.

The five T-2 banks are Union Bank, FCMB, Diamond, Stanbic IBTC and Fidelity Bank.

In the overall the figures of the T-1 and T-2 indicates that other smaller banks’ share of the market are on the increase.

Leaders & Laggards

In absolute figures, UBA led the e-payment income chart with N35.2 billion, followed by FBN Holdings with N27.2 billion, and Access Bank with N21.3 billion.

Union Bank recorded the lowest e-payment income of N2.2 billion, followed by Stanbic IBTC with N5.17 billion and Fidelity Bank with N9.3 billion.

But in terms of growth, Access Bank led with 446 per cent growth, followed by Union Bank with 214 per cent growth, and UBA with 81 per cent.

The growth laggards were led by FCMB which recorded decline of 8 per cent, followed by GTBank with decline of five percent, and Zenith Bank with growth of 7 per cent.

FCMB however led in terms of share of e-payment income in total fees and commission income with its e-payment income accounting for 77 per cent of total fees and commission income. It was followed by UBA with 48 per cent and Fidelity Bank with 45 per cent.

Stanbic IBTC came last with e-payment income accounting for 10 per cent of total fees and commission income. It was followed by Zenith Bank with 16 per cent and Union Bank with 21 per cent.

Bank performance

Access Bank grew its e-payment income by 416 per cent to N21.3 billion in 2016, from N3.9 billion in 2015. Its e-payment income ratio of    total fees and commission income also increased to 38 per cent from 12 per cent in 2015. The bank in its annual report explained that: “The increase in channels and other E-business income is a result of increase in volume of e-channel and card transactions.”

Diamond Bank grew its e-payment income by 30 per cent from N10.1 billion in 2015 to N13.7 billion in 2016. Its e-payment income ratio of total fees and commission income however remained stable at 28 per cent.

The e-payment income of FCMB dropped by 8 per cent to N13.7 billion from N14.9 billion in 2015. Also its e-payment income ratio of    total fees and commission income dropped to 77 per cent from 79 per cent in 2015.

FBN Holdings, the parent company of Firstbank Limited, grew its e-payment income by 37 per cent to N27.2 billion from N19.9 billion in 2015. Also its e-payment income ratio of    total fees and commission income rose to 38 per cent from 31 per cent.

Fidelity Bank’s e-payment income rose by 29 per cent to N9.3 billion from N7.2 billion in 2015, while  e-payment income ratio of total fees and commission income    rose to 45 per cent from N42 per cent.

The e-payment income of GTBank dropped by five per cent to N18.8 billion in 2016 from N19.7 billion in 2015, while its e-payment income ratio of total fees and commission income also dropped to 37 per cent from 38 per cent.

On its part, Stanbic IBTC was able to grow its e-payment income by 57 per cent from N3.3 billion in 2015 to N5.17 billion in 2016. Its e-payment income ratio of total fees and commission income also increased to 10 per cent from 8 per cent.

Industry leader, UBA grew its e-payment income by 81 per cent from N19.4 billion in 2015 to N35.2 billion in 2016, while its e-payment income ratio of total fees and commission income also rose to 48 per cent from 31 per cent.

Union Bank  grew its e-payment income by 214 per cent to N2.2 billion from N715 million in 2015. Its e-payment income ratio of total fees and commission income also rose sharply to 21 per cent from 9 per cent.

On its part, Zenith Bank achieved marginal growth of 7 per cent in its e-payment income which rose to N10.7 billion from N9.99 billion in 2015, while its e-payment income ratio of total fees and commission income stagnated at 16 per cent.

*E-payment transactions fall by 11% in April

Meanwhile, the phenomenal growth in e-payment transactions recorded in March was reversed in April, with 11 per cent decline. The decline was driven by slow down in Mobile, Instant transfer, and Electronic funds transfer transactions.

According to the Nigeria Interbank Settlement System (NIBSS) report for April, value of e-payment transactions through Point of Sale (PoS) terminals, Mobile payment, NIBSS Instant Payment (NIP) and NIBSS Electronic Funds transfers (NeFT) dropped to N5.34 trillion in April from N5.99 trillion in March while the volume of the transactions also dropped by 5 per cent to 36.7 million in April from 38.6 million in March.

This contradicts the 13 per cent and 11 per cent growth recorded in value and volume of transactions in March.

The NIBSS report showed that the volume and value of PoS transaction in April rose marginally to 10.8 million and N104.8 billion from 10.1 million and N104.5 billion in March.

However, the volume and value of mobile transactions dropped by 9 per cent and 5 per cent respectively to 479 million worth N16.6 billion from 506 million transactions worth N18.2 billion recorded in March.

Also, the volume and value of NIP transactions dropped by 9 per cent and 5 per cent respectively to 24.3 million transactions worth N4.3 trillion in April  from 25.5 million transactions worth N4.7 trillion in March.

Volume and value of NEFT transaction also dropped by 40 per cent and 22 per cent respectively to 1.5 million transactions worth N918 billion in April from 2.5 million transactions worth N1.17 trillion in March.

But when compared with the transactions recorded in April 2016, the volume and value of transactions through the four channels rose by 172 per cent and 37 per cent from 16.9 million transactions worth N3.9 trillion recorded April 2016 to 36.7 transactions worth N5.34 trillion recorded April this year.

Also the total volume and value of transactions through the four channels from January to April 2016 rose by 134 per   cent and 51 per cent respectively from 59.7 million transactions worth N14.4 trillion in January to April 2016 to 140 million transactions worth N21.8 trillion recorded from January to April 2017.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.