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First Bank Makes N28 Billion From Electronic Bank Charges In H1

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First Bank of Nigeria (FBN) Holdings Plc has made about N28 billion from electronic transactions in the first half of the year.

From the bank’s unaudited financial statement for the first half of the year, it was discovered that revenue from e-banking increased by 32.7% year-on-year from the N21.72 billion recorded in the corresponding period of last year.

One of the ways banks generate money is from digital transactions by customers as they charge commissions/fees on the use of mobile applications, Automated Teller Machines (ATM), USSD channels, internet banking, Point of Sales (POS) payments, and agency banking.

The increase in electronic banking fees was pivotal to the growth recorded in the bank’s overall fee and commission income which grew by 18.46%, from N55.78 billion recorded in the first half of 2020 to N69.08 billion posted in the corresponding period of this year.

Earlier this year, the Central Bank of Nigeria (CBN) imposed a policy that mandated Nigerians to pay a compulsory N6.98 on every USSD transaction.

On the other hand, several Nigerians are now beginning to seek cheaper alternatives, as digital banks are rising in the banking space, charging minimal to even zero fees for electronic transactions.

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Access Bank introduces USSD to protect customers against fraud

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Seeking best-in-class ways to safeguard the resources of its customers, Access Bank PLC introduced the *901*911# USSD code, a solution that allows customers act swiftly to prevent fraudulent activities on their accounts.

According to the Bank, the service allows customers of all account types to deactivate a USSD profile simply by dialling *901*911# from any phone, inputting the registered phone number for the account to be protected and this automatically locks out fraudsters from the individual’s account.

The Bank also said it has created dedicated pages on its official website that constantly update customers on the schemes fraudsters employ to defraud them while bringing to public notice the quickest platforms to access help in the event of any suspected fraud case.

In its promise to offer customers more than banking, Access Bank has not wavered in its drive to not only deliver speedy services but also security for all.

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Unity Bank hits N1.28 billion profit after tax in first six months

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Unity Bank Plc has announced a profit after tax of N1.38 billion for the first six months of 2021.

The bank also announced gross earnings of N23.6 billion, representing an increase of four per cent.

The bank said this in its unaudited financials submitted to the Nigerian Exchange Limited on Friday.

The gross earnings was higher compared with the N22.8 billion posted in the comparative period of 2020.

The bank grew its bottom-line by 34 per cent as profit before tax closed at N1.50 billion from N1.12 billion in 2020.

Similarly, the profit after tax stood at N1.38 billion against N1.03 billion recorded in the corresponding period of 2020.

The lender also sustained growth the trajectory in its assets as total assets for the period rose by 11 per cent to N547.37 billion from N492.02 billion as of Dec. 31, 2020.

Other highlights of the financial statement include a 21 per cent increase in fee and commission income to N3.07 billion from N2.54 billion in the corresponding period of 2020.

Net interest income stood at N9.87 billion, representing nine per cent increase from the N9.06 billion recorded in the corresponding period of 2020.

Commenting on the result, the Managing Director, Unity Bank Plc, Mrs Tomi Somefun, said the performance was encouraging in spite of the economic challenges.

Somefun said the double-digit growth recorded in both earnings and profits was the result of a portfolio plan, which the bank embarked on at the beginning of the year to diversify its portfolio.

She added that the bank pursued asset creation in petrochemical downstream, consumer, healthcare and general commerce, with agribusiness providing the bulwark for identified business and brand benefits.

She said the bank would be looking to strengthen its balance sheet from the liability side as it continued to grow its brand franchise in many areas of the retail market by promoting and leveraging its agriculture value chain businesses.

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First Bank Scoops N28 Billion From Electronic Banking Fees

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First Bank of Nigeria Holdings Plc has generated a total revenue of about N28 billion from electronic transactions in the first half of the year (HY 2021).

A breakdown of the bank’s unaudited financial statement for the first half of the year shows that revenue from e-banking increased by 32.7% year-on-year, from the N21.72 billion recorded in the corresponding period of last year.

It is pertinent to note that electronic banking revenues are generated through various digital transactions utilized by the customers of a bank. The revenue is spawned through fees and commissions gotten through transactions like mobile applications, Automated Teller Machines (ATM), USSD channels, internet banking, Point of Sales (POS) payments, and agency banking.

Investment One
The increase in electronic banking fees was pivotal to the growth recorded in the bank’s overall fee and commission income, which grew by 18.46%, from N55.78 billion recorded in the first half of 2020, to N69.08 billion posted in the corresponding period of this year.

This growth is coming on the back of a slew of stiffer competition posed by challenger banks such as V-Bank and Kuda Bank, which have in recent times attracted significant funding and expanded their capital base. These banks offer zero fees as an attractive selling point which they hope will sway customers from the big commercial banks.

Further checks into the historical trend of the e-banking revenue scooped by the bank revealed that the recent amount is the highest posted by the bank in the first half of the last eight years. The diagram below summarizes the amount that the bank has posted in the first half of the last eight years.

 

According to the data sourced from the half-year financial statements of the bank in the last eight years, the top-tier bank has generated a cumulative N121.46 billion as e-banking fees.

Industry comparison
At the time of writing this report, other top tier banks like GTB, Access, Zenith and UBA had not released their half-year results, making it difficult to compare the bank’s revenue from digital services with those of its competitors for the current period under review.

However, other indigenous commercial banks that have released their 2021 half-year results, recorded the following amount as revenue from electronic banking.

FCMB – N6.69 billion (+54.5% YoY)

Sterling Bank – N3.6 billion (+39.8% YoY)

Jaiz bank
Union Bank – N3.55 billion (-3.0% YoY)

Unity Bank – N1.57 billion (+23.3% YoY)

Wema Bank – N1.22 billion (+7.0% YoY)

Recall that First Bank recently posted a profit after tax of N38.05 billion for the first half of the year (H1, 2021). The bank also reported a Net Fees and Commissions of N57.4 billion and printed earnings per share of N1.05 during the aforementioned period.

Earlier in June this year, the commencement of a N6.98 flat-fee charge on all USSD transactions in Nigeria was reported.

FBN Holdings Plc shares closed trading on the floor of the Nigerian Exchange Group Limited (NGX) for the month ended July 30, 2021 at N7.40.

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