In 2023, Nigerian tier-1 banks made N392 billion from electronic commerce as an increasing number of Nigerians used cashless payment methods.
The five largest banks in the nation—FBN Holdings, United Bank for Africa (UBA), GTCO Holdings, Access Holdings, and Zenith Bank—are responsible for this sum.
Based on their financial results for the entire year 2023, all the banks experienced an increase in revenue from electronic business during the reviewed period.
In particular, the United Bank for Africa (UBA), which brought in N125.5 billion during the reviewed year, outperformed other banks in this business category.
Comparing this to the N78.9 billion recorded in 2022, the company’s e-business income has increased by 59%.
With N99.1 billion in income from e-businesses, Access Holdings emerged in second place for the year. From N59.6 billion in transactions the bank recorded the year before, its electronic transactions increased by 66% in 2023.
Interim data for the time were made public, and while FBN Holdings has not yet issued its certified financial statements for the year, it did indicate that its e-business income increased from N55 billion in 2022 to N66 billion in 2023.
This indicates a 20% rise in the company’s revenue from electronic transactions. By the time the business delivers its audited financial reports later this month, the number might have increased.
Revenue from card products, associated services, and electronic channels is included in e-business income. Mobile apps, USSD channels, ATMs, agency banking, online banking, and point-of-sale (POS) payments are some examples of these channels.
GTCO and Zenith continue to expand
The two other tier-1 banks saw growth in their e-business revenue for the year, despite their numbers being less than those of UBA, Access, and FBN.
In the year under review, Zenith Bank’s electronic transactions brought in N51.8 billion. Over the N45.7 billion recorded in 2022, this is a 13% increase.
In 2023, GTCO Holding’s e-business revenue amounted to 40.8 billion. Compared to the N37.7 billion the company made the year before, this is an increase of 8%.
Concurrently, an examination of the financial statements of other banks indicated a rise in their e-business income. For example, FCMB increased its revenue from electronic transactions by 26% to N17.7 billion in 2023.
Stanbic IBTC made N4.4 billion in 2023, a 76% increase from the N2.5 billion it earned the previous year, nearly doubling its e-business earnings. During the same period, Wema Bank also saw growth in e-business, going from N6.1 billion in 2022 to N7.3 billion in 2023.
Additionally, Fidelity Bank’s e-business income increased by 29% year over year, from N2.8 billion in 2022 to N3.6 billion in 2023.
IT spending by Tier-1 banks
Upon examination of the tier-1 banks’ operating expenses, it is evident that they also augmented their expenditures toward enhancing their IT infrastructure over the year. For example, Access Holdings boosted its IT spending from N44.6 billion in 2022 to N78 billion in 2023, a 75% increase.
Additionally, Zenith Bank increased its IT expenditure by 9%, from N30.9 billion in 2022 to N33.6 billion in 2023. In the year under review, UBA, the company with the greatest e-business income, spent N23.2 billion on IT, a 149% increase over the N9.3 billion the company spent in 2022.
In 2023, GTCO Holdings invested N50.2 billion in IT infrastructure. When comparing this to the N42.3 billion spent in 2022, there has been an increase in spending of 18.6%. The amount that FBN Holdings has spent on IT is not yet public.
Growth of e-payments
In the meantime, the rise in the banks’ e-business revenue is a reflection of the expansion of the electronic payment sector as a whole, in which fintechs are also making significant contributions.
The Nigeria Inter-Bank Settlement System (NIBSS) released data showing that as more Nigerians adopt cashless payments, electronic payment transactions in the country reached an all-time high of N600 trillion in 2023.
Over the N387 trillion reported in 2022, the value of the NIBSS Instant Payment (NIP) indicates a 55% rise.
The e-payment data indicates a consistent rise over the year, with December recording the greatest amount.
