Nigerian banks are still largely reliant on income from other non-core banking functions to boost revenues and juice earnings, despite efforts by the Central Bank of Nigeria (CBN) to get them to play bigger roles in the real economy via extending loans.
According to data gleaned from the Nigerian Exchange Group, nine banks recorded combined non-interest incomes of N2.11 trillion in 2022, a 26.7 percent growth from N1.64 trillion in 2021.
The banks surveyed include Access Bank, Zenith Bank, Ecobank, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Union Bank, Stanbic IBTC Holdings, Wema Bank and First City Monument Bank (FCMB).
Further analysis reveals Access Bank’s N508 billion non-operating income is attributable to most contribution from net gains on financial instruments at fair value, Zenith Bank’s N381 billion stood on the back of most contributions from trading gains while Ecobank’s N362.1 billion was driven by net fee and commission income.
Bank analysis
Access Bank
Access Bank’s non-interest income recorded 55 percent growth which amounted to N508 billion in 2022 from N327.6 billion in 2021.
The main drivers of Access Bank’s non-interest income are net gains on financial instruments at fair value which contributed the most N281.3 billion, following net fee and commission income contributed N145.7 billion.
Other contributors include net foreign exchange gain, other operating income and net gain on fair value hedge which accounted for N34.5 billion, N26.8 billion and N19.7 billion in 2022 respectively.
The bank’s net gains on financial instruments at fair value stood at N281.3 billion, a 528 percent increase from N44.8 billion in the reviewed period.
Access Bank’s net fee and commission income stood at N145.7 billion, a 23 percent increase from N118.3 billion in the comparable period.
Net foreign exchange gain received by Access Bank accounted for N34.5 billion in 2022, 66 percent drop from N101.1 billion in 2021.
Access Bank’s other operating income stood at N26.8 billion, 58 percent increase from N63.4 billion in the reviewed period.
The bank received net gain on fair value hedge worth N19.7 billion in 2022 from net loss on fair value hedge of N872 million in previous year.
Zenith Bank
Zenith Bank’s non-interest income amounted to N381 billion from N309 billion which represents 23.3 percent growth during the reviewed period.
The main contributors to the bank’s non-interest income are trading gains at N212.7 billion, net income on fees and commission contributed N132.8 billion and other operating income at N35.5 billion in 2022.
Trading gains received by Zenith Bank amounted to N212.7 billion, a 27 percent increase from N167.5 billion in the period reviewed.
Zenith Bank’s net income on fees and commission grew 28 percent to N132.8 billion from N103.9 billion in the comparable period.
Zenith Bank’s other operating income stood at N35.5 billion in 2022, a 6 percent decline from N37.6 billion in 2021.
Ecobank
Ecobank’s non-interest income amounted to N362.1 billion in 2022, an 8.9 percent increase from N332.6 billion in 2021.
The main drivers of Ecobank’s non-interest income are net fee and commission income which contributed N200.9 billion, followed by trading income which amounted to N132.6 billion, other operating income contributed N22.9 billion and net investment income at N5.6 billion in 2022.
The bank’s net fee and commission income amounted to N200.9 billion in 2022, 9 percent increase from N184.9 billion in 2021.
Trading income received by Ecobank amounted to N132.6 billion, 10 percent increase from N121.04 billion in the period reviewed.
The bank’s other operating income grew to N22.9 billion, 20 percent increase from N19.1 billion in the comparable period.
Ecobank’s net investment income stood at N5.6 billion, 26.3 percent increase from N7.6 billion in the comparable periods.
United Bank for Africa (UBA)
UBA’s non-interest income grew 69 percent to N213.4 billion in 2022 from N126.3 billion in 2021.
The main drivers to UBA’s non-interest income are net fee and commission income at N128.2 billion, net trading and foreign exchange income which accounted for N72.2 billion and other operating income which stood at N13.04 billion in 2022.
The bank’s net fee and commission income rose to N128.2 billion, a 27 percent increase from N100.9 billion in the reviewed period.
Net trading and foreign exchange income amounted to N72.2 billion from N16.4 billion which indicates 340 percent growth.
Other operating income received by UBA amounted to N13.04 billion in 2022, 45 percent increase from N9 billion in 2021.
Guaranty Trust Holding Company (GTCO)
GTCO’s non-interest income summed up to N200.7 billion in 2022 from N172.4 billion in 2021 which indicates 16.4 percent year on year growth.
The main contributors to GTCO’s non-interest income are other income with N82.9 billion, net fee and commission income which summed up to N77.5 billion and net trading gains on financial instruments at N40.3 billion in 2022.
GTCO received the sum of N82.9 billion as other income in 2022, 7.5 percent increase from N77.1 billion in 2021.
The bank’s net fee and commission income amounted to N77.5 billion, an 18 percent increase from N65.7 billion in the reviewed period.
GTCO’s net trading gains on financial instruments received by GTCO amounted to N40.3 billion, 36 percent growth from N29.6 billion in the comparable period.
Union Bank
Union Bank’s non-interest income amounted to N168.6 billion in 2022, indicating a 7.7 percent growth from N156.5 billion in 2021.
The main contributors of Union Bank’s non-interest income are operating income which accounted for N112.5 billion, net trading income at N23.6 billion and net fee and commission income at N12.8 billion in 2022.
Other contributors are recoveries which accounted for N8.3 billion, the bank’s net income from other financial instruments at fair value through profit or loss which amounted to N6.5 billion and other operating income which accounted for N4.9 billion.
The bank’s operating income grew to N112.5 billion in 2022, an 11.9 percent increase from N100.5 billion in 2021.
Net trading income amounted to N23.6 billion in 2022, 174 percent increase from N8.6 billion in 2021.
Net fee and commission income received by Union Bank stood at N12.8 billion in 2022, 7 percent decline from N13.7 billion in 2021.
Recoveries amounted to N8.3 billion, a 47.8 percent increase from N15.9 billion in the reviewed period.
Net income from other financial instruments at fair value through profit or loss amounted to N6.5 billion, a 20.7 percent increase from N8.2 billion in the comparable period.
Union Bank’s other operating income stood at N4.9 billion in 2022, a 49 percent decline from N9.6 billion in 2021.
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Stanbic IBTC
Stanbic IBTC’s non-interest income amounted to N127 billion in 2022, 32.6 percent growth from N95.8 billion in the comparable periods.
The main contributors to Stanbic IBTC’s non-interest income are net fee and commission revenue which accounted for N91.1 billion, trading revenue contributed N34.7 billion and other income which amounted N1.2 billion in 2022.
The holding company’s net fee and commission revenue rose to N91.1 billion, 10 percent growth from N82.9 billion in the comparable period.
Stanbic IBTC’s trading revenue grew 161 percent to N34.7 billion from N13.3 billion in the period reviewed.
Other income received by Stanbic IBTC amounted to N1.2 billion in December 2022 from other loss which stood at N566 million in the year ago period.
Wema Bank
Wema Bank’s non-interest income climbed 30.7 percent to N97.9 billion in 2022 from N74.9 billion in 2021.
The drivers of Wema Bank’s non-interest income are mainly operating income at N74.4 billion, net fee and commission income at N16.6 billion, net trading income contributing N4 billion and other income at N2.9 billion in 2022.
The bank’s operating income amounted to N74.4 billion in 2022, 31.4 percent increase from N56.6 billion in 2021.
Net fee and commission income received by Wema Bank amounted to N16.6 billion in 2022, 24 percent increase from N13.4 billion in 2021.
Net trading income stood at N4 billion in 2022, 150 percent growth from N1.6 billion in 2021.
The bank’s other income dropped 12 percent to N2.9 billion from N3.3 billion in the period reviewed.
FCMB
FCMB’s non-interest income amounted to N53.4 billion, a 23.6 percent increase from N43.2 billion in the period reviewed.
The main contributors to the bank’s non-interest income are net fee and commission income at N34.01 billion, net trading income (N18.2 billion) and other income (N1.2 billion).
The bank’s net fee and commission income rose to N34.01 billion, 18 percent increase from N28.8 billion in the reviewed period.
Net trading income received by FCMB amounted to N18.2 billion, a 42 percent increase from N12.8 billion in the comparable periods.
The bank’s other income stood at N1.2 billion in 2022, 25 percent decline from N1.6 billion in 2021.
