Leading banks in Nigeria have raked in N620.89 billion in the third quarter of this year, Q3’22 from fees and commission income, representing a 21.5 percent higher than N510.99 billion they made under same income line in the corresponding period 2021.
The banks include Zenith Bank Plc, Access Bank Plc, First Bank, Stanbic IBTC Holdings Plc, United Bank for Africa (UBA) Plc, GTBank Plc, Fidelity Bank Plc, Unity Bank Plc, Wema Bank Plc, Sterling Bank Plc and Union Bank of Nigeria (UBN) Plc.
Fees and commissions account for a significant percentage of non-interest income for banks and represent income from account maintenance fees, bank transfer charges, commission on transactions (COT) and other non-interest bearing income lines of banks.
Vanguard’s findings from the banks’ financial results for the period show that Fidelity Bank recorded the highest growth rate as its net fees and commission income for the period rose by 104 percent to N83.12 billion from N40.74 billion in 2021.
Wema Bank followed with 37.8 percent increase to N12.02 billion from N8.72 billion; Zenith Bank Plc ranked third, posting a 27.8 percent to N100.06 billion as against N78.3 billion in 2021; UBA emerged fourth with 21.1 percent increase to N82.22 billion from N67.92 billion, while Sterling Bank recorded the fifth biggest growth of 19.8 percent to N15.58 billion from N13.01 billion in the corresponding period in 2021.
However, Zenith Bank Plc topped others in real terms, netting N100.06 billion in the nine months in 2022 from N78.3 billion. It was followed by Fidelity Bank and UBA at N83.12 billion and N82.22 billion respectively.
Commenting, David Adonri, Vice Chairman, Highcap Securities, said the increase recorded by the banks during the period was not surprising, adding that while banks rip the customers off through loads of charges, they pay negligible amounts in return on customers’ deposits and other services.
“The fees charged by banks and commissions received for various services they render constitute major sources of income for them. At the same time, the banks pay out fees and commissions for services they receive to keep their businesses active. Banks always maximize their fees and commissions income while minimizing their fees and commissions expenses. This adds to their net interest income to produce profit.
“In desperate efforts to maximize income, banks load a lot of fees and commissions on customers. One of such ripoffs is the 11 percent fee charged by banks when a customer transfers dollars from his domiciliary account in one bank to another bank even within Lagos. While banks pay between two percent and four percent per annum as interest on savings, they charge up to 35 percent per annum for lending, thereby creaming off huge net interest income of about 30 percent in addition to their administrative fees.
“It is, therefore, not in doubt that the jumbo profits which banks make comes from exorbitant fees, commissions and levies that they extract from customers,” he said.
(VANGUARD)
