Seven major Nigerian banks have reported a combined revenue of N132.45 billion from their e-business operations in the first half of 2024, highlighting the increasing adoption of digital banking across the country. This revenue surge stems from digital transactions through platforms such as mobile banking, ATMs, POS terminals, and electronic fund transfers (EFTs).
The banks that posted these earnings include FBN Holdings, Zenith Bank, GTCO Holdings, Stanbic IBTC, Wema Bank, FCMB, and Sterling Financial Holdings. These figures, sourced from their half-year financial statements, underscore the growing shift towards online banking services as customers move away from traditional methods.
Top Performers in E-Business
Zenith Bank emerged as the top earner, generating N41.2 billion in e-business revenue—a remarkable 85.6% increase from N22.2 billion in the same period in 2023. Following closely, FBN Holdings posted N35.1 billion, marking a modest 3.2% rise compared to N34 billion in the first half of 2023.
GTCO Holdings recorded an impressive N32.5 billion in revenue from e-business activities, reflecting a 53.3% increase from N21.2 billion in H1 2023. FCMB also saw a strong growth of 45.9%, earning N10.8 billion compared to N7.4 billion in the prior year.
Wema Bank, leveraging its ALAT digital platform, saw an extraordinary 96.8% rise in its e-business income, generating N6.1 billion in H1 2024 compared to N3.1 billion last year. Sterling Financial Holdings reported N4.6 billion, up 4.5% from N4.4 billion in the same period last year, while Stanbic IBTC’s e-business revenue remained flat at N2.1 billion.
Increasing IT Investments
As digital transactions surge, the banks have also ramped up their IT infrastructure spending. For instance, GTCO increased its IT investments by 115%, from N17 billion in H1 2023 to N36.6 billion this year. Similarly, Zenith Bank’s IT spending rose by 167% to N23 billion, while Stanbic IBTC and FCMB increased their IT expenses to N15.8 billion and N8.3 billion, respectively.
Industry Outlook
The growing reliance on digital banking also brings increased cyber risks. Experts, including Dipo Alabede of Clane and Tayo Ogunlade of Onafriq, have emphasized the need for banks to invest in cybersecurity to safeguard against phishing attacks, ransomware, and other threats. They also stress the importance of collaboration within the financial sector to fortify the digital payment ecosystem.
As fintech companies continue to disrupt the traditional banking landscape, Nigerian banks are expected to enhance their IT infrastructure further to stay competitive in the evolving financial environment.
Growth in Nigeria’s E-Payment Sector
The rise in e-business revenue for banks mirrors the broader expansion of electronic payments in Nigeria. Data from the Nigeria Inter-Bank Settlement System (NIBSS) reveals that electronic payment transactions in the country surged to N234.4 trillion in Q1 2024, an 89% increase from N123.9 trillion in the same period in 2023. This includes transactions via internet banking, mobile apps, USSD, POS, and ATMs, underscoring the growing dominance of digital payment channels in Nigeria.
With continued growth in digital banking and electronic payments, Nigerian banks are poised to see even higher revenues from e-business in the coming years.
