UBA, Access, Three Others Generate N127.3bn Income From E-banking Transactions

More Nigerians are embracing the electronic banking option as seen in the income of the five leading banks that generated a total of N127.3 billion from online transactions in nine months of 2020.

The income that represents 1.02 percent increase over N126.45billion that was reported in nine months of 2019 was buoyed by the Covid-19 pandemic that forced people to stay indoors as part of measures to cut its spread. The pandemic has shifted banking transactions from the transactions across the counter and cheque issuance to online banking which has also helped the banks to cut down on overheads and encouraging their staff to work remotely.

The five are Access Bank, UBA Plc, GTB, Zenith Bank, and First Bank which InsideBusiness.NG analysis show that they generated the above amount via customers' usage of the Automated Teller Machines (ATMs) N65 charges on remote-on-us transactions, Online transfer, Unstructured Supplementary Service Data (USSD), and Points of Sales Terminal (POS) transactions.

Findings also show that some banks struggled to improve on electronic transactions income as most of their customers leveraged on FinTech companies for withdrawal and to send money during the COVID-19 lockdown.

InsideBusinessNG analysis of the transactions between January and September shows that Access Bank Plc and United Bank for Africa Plc (UBA) generated a significant increase on E-banking transactions in the period under review.

Access Bank reported 105 per cent increase on its E-banking income, bringing it to N38.8 billion in nine months of 2020 from N18.96 billion reported in nine months of 2019 while UBA reported N27.87 billion or 4.3 per cent increase over N26.71 billion reported in nine months of 2019.

Guaranty Trust Bank plc (GTBank) reported a 26 per cent decline in its E-banking income, as it fell to N8.21billion in nine months of 2020 from N11.04billion that it reported in nine months of 2019.

Zenith Bank Plc also reported a 48 per cent drop in E-banking income in 2020. It generated N18.46billion in nine months, from the N35.32billion reported in nine months of 2019.

For FBN Holdings Plc, it was 0.05 per cent dip in revenue from its electronic banking fee that dropped to N34.41billion in nine months of 2020 from N34.42billion reported in nine months of 2019.

The Group Managing Director, UBA Plc, Kennedy Uzoka, admitted this when he noted that “Our Direct Sales Agents, Agency Banking Network, and Digital Banking propositions have positioned us at the forefront of financial inclusion across geographies where we operate”.

He pointed out that during the period under review, the Bank was able to provide support to customers across its footprint, assisting them to navigate the negative impact that Covid-19 pandemic has had on livelihoods, businesses and social life.

Finance experts had said, the increasing number of Fintech companies tend to affect E-banking income of banks.

They also stated that bank customers and Information Technology innovation in the banking sector played a critical role in E-banking income generated by commercial banks operating in the country.

The Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, had said that electronic transaction volumes increased by about 67 per cent during the COVID-19 lockdown with increased transactions noticed at agent networks.

 

Emefiele at the 20th edition of the National Seminar on Banking and Allied Matters for Judges stated that the payment system infrastructure accommodated the surge as more citizens moved to electronic channels.

Emefiele who was represented by the Deputy Governor of CBN, Aisha Ahmad, at the seminar, said that the banking and payments system was able to retain its operational resilience, maintaining the availability of electronic payment and mobile banking channels.

Emefiele, who highlighted the role of technology, noted that this was in the face of the COVID-19 pandemic, which has ‘’unravelled itself as a global health and economic crisis of seismic proportions’’.

He said that domestic and international travel and global trade value chains had suffered severe disruptions, with significant negative impact on financial markets, financial services industry, oil and gas, health, transport & aviation, education, hospitality and tourism, to mention just a few.

“Individuals, families, businesses, industries, economies, countries – all have had to adapt to a new normal, even as global coronavirus cases continue to rise above 50 million.

“The effects of the pandemic, particularly the crash in international oil prices, disruption in trade value chains and muted business activities during the lockdowns have severely impacted economic output and heightened domestic macroeconomic vulnerabilities with GDP growth for Q2 2020 contracting by 6.10per cent compared to 1.87per cent growth in Q1, 2020, a decline of -7.9per cent,” he said.