Nigerian banks listed on the Nigerian Stock Exchange generated a sum of 77.01 billion naira through e-commerce in the first quarter of 2022, increasing revenue by 11.7% from the 68.92 billion naira recorded in the during the corresponding period of the previous year.
This is according to the analysis of data collected by Nairalytics from the financial statements of listed banks.
Notably, Access Bank, UBA and Zenith Bank topped the list of banks with the highest e-commerce revenues in the first quarter of 2022. It should be noted that the banks also generated an aggregate profit after tax of 276.31 billion naira during the reporting period, up 14.8% from the 240.78 billion naira posted in the first quarter of 2021.
The list was dominated by the country’s Tier 1 banks, usually referred to as FUGAZ, an acronym used to describe First Bank, UBA, GT Bank, Access and Zenith Bank. Basically, e-commerce revenue includes revenue from electronic channels, card products, and related services.
Specifically, revenue is generated through transactions such as mobile apps, USSD channels, automated teller machines (ATMs), bank branches, internet banking, and point-of-sale (POS) payments.
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The e-commerce sector is becoming very competitive
The e-commerce space in the Nigerian financial sector has become very competitive in recent years, with the entry of many players into the sector, most of which operate as financial technology companies (FinTechs) as well as with participation telecommunications companies.
Recall that the Central Bank of Nigeria has granted Airtel and MTN the authorizations to operate a payment services bank (PSB) in the country, thus creating more competition in the financial space. This adds to the massive influx into the FinTech space.
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This means that commercial banks will have to innovate with different electronic offerings to ensure market dominance and customer loyalty. Meanwhile, Nigeria’s banking penetration rate is still low, owing to its high proportion of the unbanked population.
Therefore, competition in the sector could help reduce the number of unbanked Nigerians, which would also boost the growth of the Nigerian financial ecosystem.
Nairametrics presents a ranking of the best banks in the country, which generated the highest revenues from e-businesses in the first quarter of the year. Note that this analysis excludes the cost of earning the income, and would have been different if the expenses incurred to earn the income had been net.
#5: GT Bank – 4.05 billion naira (position maintained)
GT Bank maintained the same position with an e-commerce revenue of 4.05 billion naira, an increase of 5% from the 3.85 billion naira generated the previous year.
The newly restructured holding company accounted for 5.3% of the total revenue generated by the thirteen banks from electronic banking.
By contrast, GT Bank’s after-tax profit declined by 5.1% to N43.21 billion from N45.55 billion for the corresponding period of 2021.
#4: First Bank – 12.19 Billion Naira (Two places down)
First Bank fell two places in the rankings to fourth after its e-commerce revenue fell 15.4% in the first quarter of 2022 to N12.19 billion from N14.41 billion. naira recorded in the first quarter of 2021.
However, the bank’s e-commerce revenue accounted for 15.8% of the total revenue captured. Meanwhile, First Bank recorded a massive increase in its after-tax profit during the period under review.
FBN Holding’s after-tax profit jumped 107.7% in the first quarter of 2022 to N32.4 billion, from N15.59 billion recorded in the corresponding period of 2021.
#3: Zenith Bank – 14.78 billion naira (one spot up)
Zenith Bank ranked third on the list with an e-commerce revenue of 14.78 billion naira in the first quarter of 2022, an increase of 32.8% from the 11.13 billion naira recorded during the corresponding period of 2021.
Nigeria’s second largest bank by asset value and the most capitalized bank on the NGX, accounted for 19.2% of the total e-commerce revenue of the thirteen banks, moving up one position in the ladder.
In addition, Zenith Bank recorded an after-tax profit of N58.19 billion, the highest of any bank, after increasing its net income by 9.7% from the N53.1 billion recorded in the first quarter 2021.
#2: UBA – N15.11 billion (one spot up)
The pan-African bank recorded a sum of 15.11 billion naira as e-commerce revenue in the first quarter of 2022, an increase of 21% compared to the 12.48 billion naira recorded in the first quarter of 2021. UBA progressed of a place compared to its third position recorded at the same time of the previous year.
The upward movement in the ranking follows its 21% increase in e-commerce revenue from 12.48 billion naira generated in the first quarter of 2021 to 15.11 billion naira during the reporting period. In the same vein, the Tier 1 bank’s after-tax profit increased by 8.8% to N41.49 billion.
#1: Access Bank – 20.13 billion naira (position maintained)
Access Bank, which is the largest commercial bank in the country, tops the list having generated N20.13 billion from its e-business, accounting for 26.1% of the total amount generated by thirteen banks in the study.
Its e-commerce revenue grew by 12.3% year-on-year from 17.92 billion naira recorded the previous year. It should be noted that Access Bank also topped the list based on the 2021 rankings with N66.28 billion generated in the full year.
In terms of profit after tax, Access Bank increased its net income by 9.2% in the first quarter of 2022 to N57.39 billion from N52.55 billion for the corresponding period of 2021.