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Banks Report N279.85 Billion Earnings from E-Banking in Nine Months

In the first nine months of 2023, eleven banks in Nigeria collectively generated N279.85 billion in earnings, reflecting a substantial surge from the N215.44 billion recorded during the same period in 2022. This surge, amounting to a 29.89% increase, underscores the growing prominence of electronic banking activities in the country. The Central Bank of Nigeria’s naira redesign policy, focusing on cashless transactions, has significantly contributed to this rise.

Cashless Transactions Surge

The naira redesign policy has prompted an increase in cashless transactions throughout 2023. With many Nigerians embracing electronic payment methods, the volume of cashless transactions has experienced a notable spike. In the first quarter alone, total cashless transactions grew by 44.84%, reaching N126.73 trillion compared to N87.49 trillion in the corresponding period of 2022.

Impact on Banking Revenue

While the naira redesign policy is currently on hold, banks continue to benefit from elevated fees derived from e-banking channels. The adoption of electronic payment channels remains strong among Nigerians. This has led to increased revenue for banks, with fees from e-banking channels becoming a significant source of income.

Bank Performance in E-Banking Earnings

  • United Bank for Africa (UBA): Leading in earnings, UBA garnered N75.75 billion from electronic fees.
  • Jaiz Bank: Despite being the lowest earner, Jaiz Bank experienced a substantial 78.55% rise, reaching N696.03 million.
  • Wema Bank: Demonstrating remarkable growth, Wema Bank’s e-banking earnings surged by 104.17% to N5.21 billion.
  • Unity Bank: Experienced an 18.44% decline, resulting in N2.22 billion from N2.72 billion.
  • Zenith Bank: Witnessed a 6.98% decline, reaching N33.55 billion from N36.07 billion.
  • Fidelity Bank: Achieved a 26.92% increase, totaling N2.85 billion from N2.24 billion.
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Prospects and Future Predictions

Banks are poised to continue reaping substantial fees from electronic banking channels. The Central Bank of Nigeria anticipates a reduction in cash payments by 2025, aligning with the country’s increasing reliance on electronic transactions. The government, recognizing the potential of this trend, expects to earn N584.18 billion from the Electronic Money Transfer levy between 2024 and 2026.

Government Initiatives

The government’s focus on the Electronic Money Transfer levy, a N50 levy on electronic transfers, reflects its strategy to capitalize on the surge in e-banking activities. With predictions indicating a rising trend in transaction volumes, the government is estimated to collect substantial revenue.

Challenges and Infrastructure Concerns

Despite the optimistic outlook, concerns have been raised about the capacity of the country’s payment infrastructure to handle the predicted surge in transaction volumes. The House of Representatives has urged the Central Bank of Nigeria to direct banks to overhaul their electronic transaction platforms, addressing potential challenges in the payment infrastructure.

In conclusion, the banking sector’s robust performance in e-banking earnings underscores the transformative impact of electronic transactions on Nigeria’s financial landscape.

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