May 19, (THEWILL)- United Bank for Africa (UBA) has maintained the lead in electronic banking (e-banking) revenue among theTier-1 banks, according to data from the FY 2023 and Q1 2024 financial statements of the institutions. In the Tier-1 category are Access Bank, FirstBank of Nigeria, Guaranty Trust Bank, United Bank for Africa and Zenith Bank.
The e-banking income includes revenue from electronic platforms, such as mobile applications, USSD channels, Internet banking, ATM, PoS as well as other debit and credit card transactions.
The banks have embarked on several avenues to expand their e-banking channels for maximum performance and enhanced revenue generation, which have created a stiff competition among them.
Analysis of the FY 2023 financial statements of the Tier-1 group in their Holco structures, revealed that the Big Five generated a total of N385.85 billion in e-banking revenue as against N277.14 billion in 2022, representing a 40 percent increase.
UBA earned the highest e-banking income among the Tier-1 financial services institutions. The bank generated N125.57 billion in 2023 representing 32.5 percent of the Tier-1 group total income for the year.
By this, Africa’s Global Bank grew its e-banking income by 59 percent when compared with N75.94 billion it earned in 2022 to emerge the first in 2023, followed by Access Bank which recorded N101.61 billion against N59.65 billion in the previous year, accounting for a 70.34 percent rise.
FirstBank grew its e-banking income by 20 perent to N66 billion in 2023 from N55 billion in the preceding year, ranking it the third among the Big-Five group. It was followed by Zenith Bank with e-banking revenue of N51.81 billion compared to N45.73 billion in the preceding year, representing a growth of 13.3 percent.
The financial statements of Guaranty Trust Bank revealed that the 34-year-old bank recorded N40.82 billion as e-banking income in 2023, against N31.73 billion in 2022, constituting a 28.6 percent increase.
The Q1 2024 financial statements of the Tier-1 group (excluding FirstBank of Nigeria) amounted to N108.95 billion against N64.32 billion or 70 percent increase and followed the same performance trend by the major banks.
UBA’s N44.35 billion e-banking revenue in Q1 2024 representing 60 percent of the total e-banking income by the four Tier-1 banks was the highest during the period. It was followed by Access Bank which recorded N33.38 billion, while Zenith Bank and Guaranty Trust Bank earned e-banking income of N19.96 billion and N11.26 billion respectively.
The remarkable increase in e-banking revenue of the banks shows the high level of interest in alternative payment system by bank customers as the CBN pushes for expansion in financial inclusion across the country.
According to Nigeria Inter-Bank Settlement System (NIBSS), e-banking activities through the electronic payment transactions in Nigeria hit an all-time high in 2023 as it rose by 55 per cent to N600 trillion, compared to N387 trillion in 2022.
Also, the total value of point of sale (PoS) transactions for 2023 was N10.73 trillion compared to N8.39 trillion recorded in 2022 indicating a 27.85 per cent increase.
The data from NIBSS indicated that in March 2023, the volume of e-payment transactions reached an unprecedented peak of 1.17 billion, followed by the 968 million transactions recorded in December.
Elaborating on the UBA’s e-banking revolution, the Group Managing Director/Chief Executive Officer, UBA Plc, Oliver Alawuba, said that the bank’s consistent investment in strengthening its digital channels has been paying off as UBA is well-positioned to meet the growing demand of its customers across Africa and beyond.
Alawuba spoke during the bank’s new executives’ visit to the Nigerian Exchange Limited’s Head Office in Lagos in 1922..
Commenting on UBA’s driving factor over the past years regarding the adoption of technology, Alawuba said, “We have invested so much in digital banking. We have great digital banking capabilities and we also have a growing customer base. Today we have over 30 million customers across various platforms and these customers are doing their transactions seamlessly.
“Over. 90% of our transactions are done digitally and we are looking at 95% shortly. This has been helping us to ensure that we manage our cost of operations and to deliver excellent customer service to our customers over time.”
He explained that the bank’s foray into the larger African market 17 years earlier continued to yield largely for the institution, as activities in the African market account for over 50% of the banks’ profitability, with room for even more opportunities going forward.
On plans and strategy for the immediate future, Alawuba said, “As it stands, UBA can lead in Nigeria and Africa, and we the new management are here to ensure that UBA takes the leadership position in every country we operate in. We will continue to focus on the customer.
“We are committed to our Customer 1st philosophy. The customer determines what we do at every point in time and we will ensure that we do all it takes to satisfy them optimally.”
UBA’s Q1 2024 financial results showed very strong growth across key performance measures.
The Group’s results saw outstanding year-on-year increases: Gross Earnings rose by 110%, from N271.1billion to N570.2 billion; Interest Income grew by 130% to N440.7 billion. Operating Income increased by 115%, from N175.7 billion in 2023 to N378.59 billion.
Further consolidating the record performance delivered in the Group’s 2023 Full Year Audited Financials, UBA again saw Profit Before Tax rising significantly by 155% from N61.7 billion in Q1 2023, to N156.34 billion in Q1 2024; while Profit After Tax jumped from N53.5 billion to N142.5 billion, representing an impressive rise of 165% year-on-year.
Commenting on the results, Alawuba, said the Group delivered a strong first quarter performance, building on the solid momentum of 2023, as well as the ongoing execution of its long-held strategy of customer focus, geographic diversification and effective risk management and governance.
He said, “Our record Q1 profit before tax was delivered with triple digit gross earnings growth, supported by very strong interest and non-interest incomes. Fees and Commissions rose by 118% year-on-year on the back of improved efficiencies and continued digital adoption. This has helped drive improvement in efficiency and customer satisfaction, with the Group’s cost-to-income ratio held at 57.8 per cent.”
“The Group’s balance sheet grew steadily with Total Assets increasing by 23 percent to N25.4 trillion. Customer deposits closed at N18.4 trillion, recording a 23 percent increase year-on-year, largely attributed to growth in current accounts and savings accounts.”
“Our unwavering commitment to sound governance, robust risk management, and financial strength positions us for continued growth, while we contribute meaningfully to inclusive economic development across our network.”
THEWILL recalls that UBA emerged Global Finance’s Best SME Bank for 2023 in Nigeria, Ghana, and Mozambique, awards that spotlight the bank’s continuous resolve towards supporting small and medium scale businesses which is the life of any growing economy.
Also, the bank, with presence in 20 African countries won the 2023 FMDQ Gold Awards in three key categories of Money Market Liquidity Provider; FX Market Liquidity Provider and Dealing Member of the Year, while UBA was also named as Global Finance’s Safest Bank in Senegal 2023.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
