Some 7 deposit money banks (DMBs) have reportedly raked in a total of N244.15 billion as fees and commission income in the first six months of this year.
This is against the N208.38 billion that the lenders reported for the corresponding period of 2017.
Newtelegraph reported that generally, Nigerian banks derive their fees and commission income from account maintenance fees, Automated Teller Machine (ATM) charges, fees from other electronic banking channels, letters of credit commission, remittances fees, card-based fees, fees from brokerage commission and financial advisory fees, among others.
The seven lenders’ H1 2018 results reviewed by Newtelegraph were those of Ecobank Transnational Incorporated (ETI), FBN Holdings (First Bank of Nigeria Limited), Zenith Bank and Guaranty Trust Bank (GTB).
Others are mid-sized DMBs – Stanbic IBTC, First City Monument Bank (FCMB) and Diamond Bank. Specifically, ETI’s H1 2018 results show that its net fees and commission income increased by 11.30 per cent to N67.12 billion in the period under review, from N60.3 billion in the comparative period of last year.
The pan-African lender was followed by Zenith Bank, which reported that its fees and commission income rose by 23.72 per cent in the first half of this year, to N46.71 billion, from N37.75 billion reported for the comparative period in 2017.
Stanbic IBTC recorded a 32.30 per cent increase in fees and commission income to N37.14 billion in the first half of 2018 from N28.807 billion it reported in the corresponding period of last year.
First Bank of Nigeria also reported growth in its fees and commission income for H1 2018 as the Tier 1 lender reportedly earned N35.05 billion for the period, which represents a 13.59 per cent increase over the N30.86 billion it posted for the comparative period last year.
Similarly, another Tier 1 bank, GTB, reported a 13.89 per cent increase in its fees and commission income for H1 2018 to N25.910 billion from N22.749 billion in the corresponding period of 2017.
FCMB and Diamond Bank also posted higher figures of fees and commission income for H1 2018 compared with what they reported last year.
However, while FCMB recorded a 37.47 per cent increase to N13.011 billion from N9.466 billion, Diamond Bank’s went up by N24 million to N19.208 billion from N19.184 billion in 2017.
Significantly, a review of these lenders’ 2017 full year results also show remarkable growth in their fees and commission income for last year compared with 2016.
Thus, ETI again recorded the highest fees and commission of N143.799 billion in 2017, up from the N124.759 billion it made the previous year. Zenith Bank posted fees and commission income of N90.143 billion in 2017 compared with the N68.444 billion the previous year.
FBN Holdings reported fees and commission income of N74.453 billion in 2017 higher than the N71.360 billion it recorded in 2016. Also, Stanbic IBTC reported net fees and commission of N59.089 billion in 2017, up from N52.154 billion the previous year; GTBank posted N42.922 billion as fees and commission income in 2017, up from the N39.403 billion it attained in 2016; FCMB reported fees and commission income of N21.630 billion, higher than N17.683 billion in 2016 while Diamond Bank earned N37.068 billion from fees and commission last year compared with the N41.432 billion it got the previous year. Interestingly, while DMBs are raking in billions in fees and commission income and using it to make up for the loss of revenue due to declining Treasury bill yields, the development is making bank customers very unhappy.
The bank customers accuse DMBs of frequently deducting illegal and excess charges from their accounts even when they (customers) never carried out such transactions. In fact, a bank fee that customers are particularly angry about is the reintroduced Commission on Turnover (CoT) fee now known as Current Account Maintenance (CAM) fee.
The Central Bank of Nigeria (CBN) had, in 2013, commenced the phased reduction of CoT, which terminated with the zero CoT charge in 2016. But in a circular to banks that year, the apex bank replaced the CoT with CAM, but subject to a maximum of N1 per N1,000 mille. However, financial analysts point out that many bank customers usually do not thoroughly scrutinise their account statements, thus giving DMBs the opportunity to make illegal deductions from such accounts.