In the first half of 2023, Nigerian banks continued their enthusiastic embrace of digital innovations, resulting in a substantial revenue of N192.010 billion from electronic transactions.
This marks a remarkable 20.32% increase compared to the N159.577 billion earned during the same period in 2022.
Beyond this surge in e-business revenue, these Nigerian banks reported robust pre-tax earnings of N1.665 trillion for H1 2023, reflecting a remarkable 132% increase from the N716.943 billion recorded in H1 2022.
This surge in e-business revenue underscores the growing adoption of fintech solutions in Nigeria, despite challenges such as the Central Bank of Nigeria’s currency redesign and cash swap in Q1 2023.
Fintech’s Impact on Nigeria’s Financial Services
Fintech’s undeniable impact is reshaping Nigeria’s financial services sector, making financial services more accessible, convenient, and affordable for both individuals and businesses.
Banks are stepping up their investments in infrastructure, with a particular focus on fintech, to enhance their services and meet the increasing demand for digital financial solutions and financial inclusion.
The surge in e-business revenue mirrors the rising adoption of mobile and online banking in Nigeria, showcasing the sector’s ability to adapt to evolving customer preferences and thrive in the digital economy.
E-Business Income Components
E-business income encompasses 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 in e-business income signals Nigeria’s banking industry as a significant beneficiary of the digital economy’s expansion.
Analysis of H1 2023 E-Business Performance in Nigerian Banks
In H1 2023, top-tier banks in Nigeria, including UBA, Access Bank, First Bank, GT Bank, and Zenith Bank, dominated the landscape of e-business income. Together, 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.
These leading banks also reported remarkable pre-tax profits of N1.104 trillion in H1, reflecting a 78.64% increase from H1 2022 when they recorded N618.557 billion. Collectively, they contributed 66% of the total pre-tax profits among all banks.
Key Performers Among the Nigerian Banks
GTCO Holdings: 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.
Zenith Bank: Zenith Bank Plc recorded an e-business income of N22.270 billion during H1 2023, though 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.
FBN Holdings: First Bank’s e-business revenue witnessed 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.
Access Holdings: Access Holdings Plc 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.
UBA: 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.
Beyond the leading banks, several others, including FCMB, Sterling Financial Holdings, Wema Bank, Stanbic IBTC, Fidelity Bank, and Jaiz Bank, have also contributed to the e-business income landscape, showcasing the dynamic and competitive nature of Nigeria’s banking sector in the digital age.
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The Fintech Revolution in Financial Services
Fintech companies are leveraging technology to transform financial services, improving accessibility, cost-efficiency, and convenience for individuals and businesses. This fintech surge has significantly expanded financial inclusion, bridging the gap for previously unbanked or underbanked populations through mobile-accessible services.
The influence of fintech is evident in the substantial increase in financial transaction volumes, simplified payment processes, effortless money transfers, and improved investment opportunities, all contributing to a significant rise in transaction volumes within Nigeria’s financial ecosystem.
Telecom giants’ involvement in financial services, especially in rural areas with limited access to traditional banks, has further amplified this impact, expanding access to financial services. These telecom companies are introducing essential infrastructure to underserved regions, substantially broadening access to financial services.
Fintech innovations are also reshaping banks’ operational landscapes, driving efficiency gains, cost reductions, and an increase in revenue from commissions and fees. This transformation highlights the central role of fintech in Nigeria’s financial sector.