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Banking Sector

Nigerian Banks Earn N438bn from Digital Channels in 2023

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First Bank

Nigerian banks collectively generated N438 billion from digital banking channels in 2023. This represents a 37.54% increase from the N318.64 billion recorded in the previous year.

An in-depth analysis of the annual reports of ten major financial institutions reveals this substantial growth.

The banks, which include FBN Holdings, Access Holdings, Guaranty Trust Holding Company, United Bank for Africa, Zenith Bank, Wema Bank, Fidelity Bank, FCMB Group, Stanbic IBTC Holdings, and Sterling Financial Holdings Company, have seen a surge in revenue from their electronic business operations.

These operations encompass a variety of digital platforms such as mobile applications, USSD channels, automated teller machines (ATMs), agency banking, internet banking, and point-of-sale (POS) payments, as well as credit and debit card transactions.

Leading the charge was United Bank for Africa (UBA), which reported an income of N125.58 billion from its electronic banking channels, a significant increase from the N78.94 billion recorded in 2022.

This robust performance underscores UBA’s strong digital banking presence and customer adoption.

Access Holdings also demonstrated a substantial increase, recording N101.62 billion from its electronic business activities. This marks a 70.34% rise compared to the previous year’s earnings.

Similarly, FBN Holdings reported N66.34 billion in revenue from its digital channels, up from N55.09 billion in 2022.

The bank attributed this growth to a rise in electronic banking fees and a broader customer acquisition drive through digital platforms.

Zenith Bank’s earnings from electronic banking fees reached N51.82 billion, showing a 13.29% growth from the previous year’s N45.74 billion.

GTCO saw its e-business income rise to N40.83 billion, up from N37.74 billion.

FCMB also reported an increase in revenue from electronic fees and commissions, reaching N17.69 billion compared to N13.99 billion in the prior year.

Fidelity Bank experienced a 20.30% rise in its e-business earnings, totaling N14.03 billion. Sterling HoldCo reported N8.588 billion from e-business commissions and fees, an increase from N7.16 billion.

Wema Bank, which prides itself on being the pioneer of Africa’s first fully digital bank, ALAT, saw its digital fees grow to N7.35 billion from N6.13 billion.

Stanbic IBTC Holdings, although reporting the least income from electronic business among the reviewed banks, still saw significant growth, with earnings rising to N4.42 billion from N2.51 billion in 2022.

The increase in digital banking revenues reflects a broader trend of technological adoption within the Nigerian financial sector.

Analysts have identified the shift towards mobile and online banking as a key driver of this growth, a trend accelerated by the COVID-19 pandemic which pushed more customers towards digital solutions.

Afolabi Olowookere, Managing Director and Chief Economist at ADSR, highlighted the sector’s robust growth and its increasing contribution to Nigeria’s Gross Domestic Product (GDP).

He noted, “The sector is growing, hence its contribution to the GDP will also grow. After COVID-19, the financial sector and ICT have been growing because people do a lot of transactions online.”

As digital banking continues to expand, Nigerian banks are expected to further invest in technological advancements and enhance their digital platforms, driving greater financial inclusion and offering more convenient banking solutions to customers nationwide.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Fidelity Bank Launches N127.1bn Public Offer and Rights Issue on June 20

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Fidelity Bank Plc, Nigeria’s sixth-largest bank, is set to open its public offer and rights issue to investors on Thursday, June 20, 2024.

In preparation for this significant financial event, Fidelity Bank will host a “Facts Behind the Offer” presentation at the Nigerian Exchange Group (NGX) on the same day.

This presentation is expected to provide detailed insights into the bank’s strategy and the opportunities presented by the public offer and rights issue.

Under the rights issue, Fidelity Bank will offer 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. These shares will be available to existing shareholders in the proportion of 1 new ordinary share for every 10 ordinary shares held as of January 5, 2024.

In addition to the rights issue, the bank will also offer 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share. This dual approach is part of the bank’s comprehensive strategy to raise a total of up to N127.1 billion.

The acceptance and application period for the rights issue and public offer will commence on Thursday, June 20, and close on Monday, July 29, 2024.

This timeline provides investors ample opportunity to participate in the bank’s capital expansion.

Fidelity Bank has engaged Stanbic IBTC Capital as the lead issuing house for the combined offer. The joint issuing houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited, and Planet Capital Limited.

These firms will play a crucial role in managing the offer and ensuring its success.

The bank’s initiative to raise N127.1 billion is seen as a strategic move to bolster its capital base and ensure compliance with the CBN’s revised capital requirements, which were introduced on March 28, 2024.

This capital raise is expected to enhance the bank’s capacity to support its growing customer base and expand its operations across Nigeria and beyond.

In recent years, Fidelity Bank has demonstrated robust financial performance and growth, positioning itself as a key player in Nigeria’s banking sector.

The successful completion of this public offer and rights issue will further solidify its standing and enable it to pursue new opportunities in the competitive financial landscape.

Investors and stakeholders are keenly anticipating the outcome of this capital-raising exercise, which is poised to mark a significant milestone in Fidelity Bank’s journey toward sustained growth and stability.

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Banking Sector

Fidelity Bank Plc Promotes 11% of Staff Following Record Financial Performance

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Leading financial institution, Fidelity Bank Plc has announced the promotion of 11% of its workforce, a testament to the exceptional performance and dedication of its employees.

This significant move follows the release of the bank’s 2023 full year Audited Financial Statements, which reported an impressive 131.5 percent growth in Profit Before Tax (PBT) to N124.26 billion.

The recent promotions span every level within the bank, reflecting Fidelity Bank Plc’s commitment to recognizing and rewarding excellence across its entire organization.

This strategic initiative has garnered positive reactions from staff members, who see it as a validation of their hard work and contribution to the bank’s remarkable financial achievements.

In addition to the promotions, Fidelity Bank Plc has also concluded arrangements to raise a total of N127.1 billion through a Rights Issue to existing shareholders and a Public Offer. This move is part of the bank’s broader strategy to strengthen its capital base, support future growth, and enhance shareholder value.

Fidelity Bank Plc’s impressive financial performance and the subsequent employee promotions highlight the bank’s robust operational strategy and its commitment to fostering a rewarding work environment. By investing in its people and ensuring their career growth, the bank continues to build a motivated and high-performing workforce.

Ranked as one of the best banks in Nigeria, Fidelity Bank Plc is a full-fledged customer commercial bank with over 8.5 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

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Banking Sector

A Failed Attempt to Trigger a Run on Banks

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As market sentiment remains highly volatile and driven by news flow, banks liquidity levels can become vulnerable due to spread of inaccurate information.
As Nigerian banks put finishing touches to their recapitalisation plans as directed by the Central Bank of Nigeria (CBN), industry watchers have seen how social media mercenaries and their hirelings are deliberating distorting the truth and pushing campaigns that spread false information which could result in deposit outflows from their targeted banks.
Earlier this month when the Central Bank of Nigeria (CBN) revoked the banking licence of Heritage Bank, it gave reasons for the decision.
The reason was clearly stated! “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability,” CBN noted.
The CBN said Heritage Bank had continued to suffer and had no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.
A statement by Hakama Sidi Ali, acting Director, Corporate Communications of the CBN, said the apex bank acted in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of the Banks and Other Financial Act, BOFIA, 2020.
Many market watchers, particularly those following developments in the banking industry did not think the CBN should have done otherwise and subsequent appointment of the Nigeria Deposit Insurance Corporation, NDIC, as the liquidator.
Mischievous ‘list’ of other banks
Shortly after the apex bank hammer fell on Heritage Bank, social media mischief makers released their own ‘list’ of other banks they felt will go the Heritage way – not minding the illegality of assuming such a regulatory position.
Thanks to Central Bank of Nigeria (CBN) for quickly debunking the fake news which had mentioned the names of other banks – Fidelity Bank, Wema Bank, Polaris Bank and Unity Bank.
“The attention of the Central Bank of Nigeria (CBN) has been drawn to some information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday, June 3, 2024.
“The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system. The Nigerian financial system remains safe, sound, and resilient. Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs).
“These plans are currently being reviewed by the Bank. In addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalise will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy. This will increase the financial system’s contribution to the growth and development of a $1 trillion Nigerian economy.
“The CBN would like to reassure all stakeholders of its unwavering commitment to ensuring the financial system’s stability. Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness,” said CBN’s Sidi Ali said in a June 4 statement in response to the false allegations of license withdrawals.

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