…Rake N71bn from account maintenance charges, E-business income
Three out of eight Domestic Systemically Important Banks (D-SIBs) in the country have recorded a whopping N348.1 billion profit for nine months ended September 30, 2018, as against N315.7 billion profit declared in the corresponding period of 2017.
The SIBs are FirstBank of Nigeria Limited, Guaranty Trust Bank Plc (GTBank), Zenith Bank Plc, United Bank for Africa Plc (UBA), Access Bank Plc, Polaris Bank Plc (Skye Bank Plc), Ecobank Nigeria and Diamond Bank Plc.
But the commercial banks considered in this report are Guaranty Trust Bank Plc (GTBank), Zenith Bank Plc and United Bank for Africa (UBA) Plc.
The three lenders, during the period under review, also generated N71billion from customers account maintenance fees and income generated on Electronic- business (E-business), which was higher than N69.7 billion raked in prior nine months of 2017.
The breakdown of the N348.1 billion profit for nine months ended September 30, 2018, showed that GTBank grew its profit by 13.3 per cent to N142 billion during the period under review, compared to N125.6 billion reported in nine months of 2017.
As for Zenith Bank, a total sum of N144.2 billion was recorded in the nine months as profit as against N129 billion reported in nine months of 2017.
UBA reported N61.6 billion profit, 1.3 per cent increase over N60.9 billion reported in nine months of 2017.
Checks by The Daily Times, however, revealed that amount generated from account maintenance fees and income generated on Electronic- business (E-business) by the three banks was put at N44.4 billion in nine months of this year as against N29.67 billion generated in prior nine months of 2017.
However, further analysis of the account maintenance charges revealed that the three banks reported 31.27 per cent drop in nine months of 2018 to N27.5 billion from N40.05 billion reported in nine months ended September 30, 2018.
But income from Automated Teller Machine (ATM), Unstructured Supplementary Service Data (USSD) and Point of Sales (POS) terminal contributed to the banks’ hike in E-business Income generated in the period under review.
A further breakdown revealed that GTBank reported 11 per cent increase in account maintenance charges to N8.4 billion from N7.5 billion reported in nine months of 2017.
The group also reported N6.77billion E-business income in nine months of 2018 from N5.6 billion in nine months of 2017.
For Zenith Bank, its account maintenance charges dropped by 48.7 per cent to N14.67 billion from N28.58 billion reported in nine months of 2017 while E-business income rose significantly by 109 per cent to N17.7 billion from N8.4 billion reported in nine months of 2017.
Also, UBA’s account maintenance charges rose by 13.6 per cent to N4.46 billion from N3.9 billion while E-income closed nine months of 2018 at N19.9 billion, 27.8 per cent increase over N15.6 billion reported in nine months of 2017.
The Central Bank of Nigeria (CBN) last year revised the card maintenance charges in the new guide which was released from N100 annually to N50 monthly. This means every debit or credit card holder will pay N600 annually as against the N100 being paid previously.
The new Guide to Bank Charges stipulates that banks charge N50 monthly as card maintenance fee on naira debit and credit cards, while foreign currency denominated debt and credit cards would be charged $20 or its equivalent on an annual basis.
Charges for new hardware token and for replacement was increased from N2500 to N3,500, while the one-time soft token is to attract an SMS charge of N4 compared to N20 that was being charged by some banks.
It, however, left the rate for acquiring new debit and credit card, renewal or replacement of the cards at a one-off charge of N1,000, while not-on-us, which is withdrawal from other banks Automated Teller Machines (ATM), would attract a charge of N65 after the third withdrawal within a month.
Meanwhile, GTBank and Zenith Bank declared an interim dividend of 30k per share respectively, while the Board of Directors of UBA proposed an interim dividend of N0.20 per share for the period under review.
Reacting to the development, President, Bank Customers Association of Nigeria (BCAN) and former Registrar, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uju Ogubunka, noted that banks customers are not happy with excess charges.
He explained that the Senate decision to summon the CBN governor, Godwin Emefiele, to explain why it approved official charges skewed in favour of banks is a welcome development.
He said: “The senators are bank customers and are in the position to make a law against such charges.
“My take is that it took the Senate so long to come up with its decision. This has been happening over the years and they are just waking up now. It is better they are awake, than to sleep forever.”
The Senate had last week asked its committees on Banking, Insurance & other Financial Institutions and Finance to investigate the propriety of ATM Card maintenance charges in comparison with international best practices and report back to the Senate.
The resolutions were sequel to a motion sponsored by Senator Gbenga Ashafa (APC, Lagos East) on “Illicit and Excessive Charges by Nigerian Banks on customers account with particular focus on Automated Teller Machine (ATM) Maintenance and Withdrawal Charges.”
Ashafa noted that there have been several complaints from Nigerians generally and on social media concerning illicit and excessive charges by commercial banks on customers’ account with a particular focus on ATM maintenance charges and ATM withdrawal charges.
The CBN had in 2017 increased the maintenance fees charged by banks on debit and credit card maintenance from N100 a year to N50 per month (N600 a year) as contained in its “Guide to Charges by Banks and other Financial Institutions.”