Zenith leads as Banks scoop N88.9bn from account maintenance charges

Zenith Bank, Access Bank and GTB led the list of banks in Nigeria with highest income from account maintenance in the 9-month period of 2021, accounting for N24.18bn of the N88.9 billion generated by banks listed on the Nigerian Stock Exchange.

The bank sits comfortably in top position having generated a sum of N24.2 billion from account maintenance, representing 27.2% of the total income by the 12 banks.

Zenith Bank increased its account maintenance income by 41.9% and 52.9% compared to N17.15 billion and N15.82 billion recorded in the corresponding periods of 2020 and 2019 respectively.

Access Bank, the largest financial institution in the country by customer base and total assets value, boasted of a N16.2 billion income from account maintenance charges, representing a 50.9% increase compared to N10.7 billion recorded in the similar period of 2020.

In similar fashion, the bank which is set to restructure into a non-operating financial holding company grew its profit after tax to N121.9 billion from last year’s figure of N102.3 billion, representing a 19.1% year-on-year increase.

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GT Bank generated a sum of N13.02 billion from account maintenance income between January and September 2021. This represents a 36.5% increase compared to N9.54 billion recorded in the corresponding period of 2020. Compared to N8.54 billion recorded in 9-month 2019, account maintenance income increased by 52.5%.

However, its net profit dropped by 9.1% compared to N142.3 billion recorded as of the same period in the previous year to stand at N129.4 billion. This was largely affected by the 14.5% decline in its interest income during the period under review.

FBN Holdings, the holding company of First Bank of Nigeria saw its account maintenance income surge by 33.3% from N8.81 billion generated in the nine-month period of 2020 to N11.7 billion in 2021. On the other hand, it increased by 19.8% compared to N9.81 billion generated in the same period of 2019.

Specifically, profit after tax dropped by 24.8% to N40.85 billion in the 9-month period of 2021 compared to N54.4 billion recorded in the previous year.

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United Bank for Africa came fifth on the list with N7.11 billion revenue from account maintenance, which is 21.6% higher than N5.85 billion recorded in the corresponding period of 2020. Also, compared to N6.04 billion recorded in the same period of 2019, it increased by 7.8%.

It is worth noting that, the pan African bank’s account maintenance income accounts for 8% of the total N88.9 billion recorded by the 12 banks under consideration. In terms of the bottom line, UBA grew its profit after tax by 35.6% year-on-year to N104.6 billion, fourth on the list of highest earners.

Others are Stanbic IBTC – N3.8 billion (+32.5%), FCMB – N3.4 billion (+33.3%) Fidelity Bank – N2.9 billion (+48.7%), Sterling Bank – N2.1 billion (+51.3%) Union Bank – N1.7 billion (+42%).

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.