Six Banks Generates N64.27bn Maintaining Customers Current Account

banking - November 10, 2021

A total of six banks generated N64.27billion from maintaining customers’ current accounts in nine months of 2021, an increase 40.6 per cent from N45.7 billion reported in nine months of 2020.

The six banks are Access bank Plc, Zenith Bank Plc, United bank for Africa, Guaranty Trust holding Company Plc, Sterling Bank Plc and Union Bank of Nigeria Plc.

THISDAY findings revealed that banks in the period under review aggressively engaged in non-banking activities to grow profit.

Specifically, Access bank grew its current account maintenance charge and handling commission by 51 per cent to N16.22 billion in nine months of 2021 from N10.75billion reported in nine months of 2020, while Zenith Bank reported about 42 per cent increase in Current account maintenance to N24.2billion from N17.05billion reported in prior nine months of 2020.

Further breakdown revealed that UBA reported 22 per cent increase in Current account maintenance to N7.12billion in nine months of 2021 from N5.85billion reported in nine months of 2020.

The Central Bank of Nigeria (CBN) in its guide to charges by banks, other financial and non-financial institution effective January 1, 2020 stated that, “Current Account Maintenance Fee (CAMF) is applicable to current accounts only in respect of customer-induced debit transactions to third parties and debit transfer. Lodgements to the customer’s account in another bank.”

The apex bank explained that CAMF is not applicable to savings accounts, stressing that a negotiable subject to a maximum of N1 per mille.

The Nigerian Senate had raised concern over current account maintenance fee, stressing that banks are overcharging customers.

The apex bank in 2013 had commenced phased reduction of Commission on Turnover (CoT), which terminated with zero CoT charge.

In addition, GTCO reported N13.03billion from account maintenance Charges in nine months of 2021, an increase of 36.48 per cent from N9.5billiion in nine months of 2020 as UBA reported 42 per cent growth in account maintenance Charges to N1.67billion and Sterling Bank closed nine months with N2.06billion maintaining customers’ current accounts from N1.34 billion reported in nine months of 2020.

According to analysts, “The Covid-19 pandemic also played a major role in bank performance as it affected the expansion of the digital rollout plans earlier on in the year.

“However, the pandemic will swing in their favour as Nigerians increasingly relied on mobile banking for transactions while avoiding banking halls for fear of contracting Covid-19.”