Raise current account maintenance revenues
Customers part with more money than in 2020
An analysis of the 9 months reports of some Nigerian lenders shows that six Nigerian banks, including Access Bank Plc, Zenith Bank Plc, United Bank for Africa, Guaranty Trust Holding Company Plc, Sterling Bank Plc and Union Bank of Nigeria Plc, cumulatively generated N64.3 billion from current account maintenance charges in the first three quarters of 2021.
The amount represents an increase of 40.6 percent from N45.7 billion reported in 2020, a year that was ravaged by the covid-19 pandemic which made financial institutions aggressively engage in non-banking activities to grow profit.
Effective January 2020, the Nigerian central bank in its guide to charges by banks, other financial and non-financial institutions, explained that the maintenance of current account fee will only be applied to the account holders subject to a maximum of N1 per mile.
“Current Account Maintenance Fee (CAMF) is applicable to current accounts only in respect of customer-induced debit transactions to third parties and debit transfer; lodgments to the customer’s account in another bank while stating that the CAMF is not applicable to savings accounts,” it had stated.
However, the Nigerian senate had earlier raised concern over current account maintenance fees by stressing that banks in Nigeria now overcharge customers.
However, the Central Bank of Nigeria (CBN) in the year 2013 began the phased reduction of commission on turnover (CoT), which led to the subsequent termination of zero CoT charge.
A breakdown of the revenues from the charges by the banks shows that Access Bank grew its current account maintenance charge and handling commission by 51 percent to N16.22 billion in nine months of 2021 from N10.75 billion reported in nine months of 2020, while Zenith Bank reported about 42 percent increase in its current account maintenance to N24.2 billion from N17.05 billion reported for 2020.
In addition, Africa’s global bank, United Bank for Africa (UBA), reported a 22 percent year on year increase in its current account maintenance to N7.12 billion in nine months of 2021 from N5.85 billion reported in nine months of 2020, while Guaranty Trust Holding Company (GTCO) recorded 36.48 percent rise to N13.03 billion in its current account maintenance charges in the three quarters of 2021 from N9.5 billion in the prior year.
Also, Union Bank of Nigeria saw a 42 percent jump to N1.67 billion while Sterling Bank closed its nine months revenue from current account maintenance charges at N2.06 billion from the N1.34 billion it reported in the same period last year.