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L-R: Herbert Onyewumbu Wigwe, CEO and Group Managing Director of Access Bank Plc, Jim James Ovia, Founder, Zenith Bank and Tunde Hassan-Odukale, Chairman of First Bank

Six Deposit Money Banks in Nigeria earned the sum of N1.005trn from their customers through various charges such as account maintenance, commission on turnover, asset management fees and administration fees among others.

The N1trn earned by the six banks within a period of 24 months covering January 2020 and December 2021, was arrived at based on analysis of their financial statements for the two-year period.

The six banks are United Bank for Africa Plc which raked the highest amount of N285.59bn during the two-year period; followed by Access Bank Plc with N275.89bn, while Zenith Bank Plc had N236.11bn.

Similarly, Guaranty Trust Bank Plc earned N127.3bn from customers through various charges; while First City Monument Bank and Union Bank recorded N47.49bn and N33.21bn respectively.

Analysis by THE WHISTLER of the financial statement of UBA showed that out of the N285.59bn earned by the bank within the two-year period, the sum of N35.59bn was from credit-related fees and commission, N6.37bn from COT charges, N19.9bn from electronic banking income, and N23.8bn from funds transfer fees.

The bank also made N38.62bn from trade transaction income, N16.15bn through remittance fees while N24.55bn and N11.68bn came in through commission on transaction service and pension funds custody fees.

For Access Bank Plc, from the N275.89bn which it raked from customers N73.85bn was through credit-related fees and commission; account maintenance charge and handling commission had N37.32bn, commission on bills and letters of credit N6.91bn; and commission on collections N4.63bn.

The bank also made N20.45bn through commission on other financial services; commission on foreign currency denominated transactions had N6.82bn; channels and other e-electronic business income generated N122.37bn, while retail account charges had N1.54bn.

Further analysis of the financial statements showed that Zenith Bank’s N236.11bn was generated through credit-related fees of N31.97bn; COT had N4.1bn; account maintenance fee N53.38bn; income from financial guarantee contract N15.70bn; while fees on electronic product had N64.55bn.

Other sources of income through charges were from foreign currency transaction fee and commission N5.43bn; assets-based management fees N15.87bn; auction fees income N1.04bn; corporate finance fees N9.33bn; foreign withdrawal charges N17.19bn; commission on agency and collection service N26.53bn.

For GT Bank, the N127.3bn which it earned from customers came from credit-related fee and commission N11.96bn; account maintenance charges N29.18bn; corporate finance fees N4.72bn; e-business income N32.85bn; commission on foreign exchange deals N13.41bn; commission on touch point N4.72bn; income from financial guarantee issued contract N5.59bn; account service maintenance and quality banking charges N13.27bn and transfer related charges N11.59bn.

The financial statement also revealed that the N47.49bn made by FCMB was generated from credit-related fees N1.19bn; account maintenance N8.38bn; letter of credit commission N1.49bn; asset management fees N6.54bn and administration fees N202m among others.

In the case of Union Bank, the statement of account showed that out of the N33.21bn generated during the reviewed period, credit-related fees and commission income contributed N9.46bn, account maintenance fees N4.04bn; e-business for income N15.92bn, commission on letters of credit, invisible trade and guarantees N3.53bn and other fees commission N262m.

In December 2019, the Central Bank of Nigeria reviewed downwards most charges and fees for banking services in its updated Guide to Charges by Banks, Other Financial, and Non-bank Financial Institutions, which took effect from January 1, 2020.

Some of the approved bank charges: Electronic Funds Transfer, before the review, the rate for e-transfers’ was N50 flat fee. But now, it is N50 for transactions done above N50,000, N25 for N5,000 – N50,000 and N10 charge for below N5,000.

The charge on ATM withdrawals from other banks’ ATMs was reduced to N35 from N65 for the third withdrawal within the same month. Today, banks charge at every withdrawal.

Naira debit or credit cards linked to savings accounts attract a maximum of N50 quarterly maintenance fee while foreign currency denominated debit/credit cards attract $10 from $20.

The charge for hardware token is subject to cost recovery subject to a maximum charge of N2,500. It was reduced from N3,500. For Naira Debit /Card Charges, the issuance fee for these cards is N1,000 (one-off charge) irrespective of the card type either regular or premium card. The same charge applies for a replacement or renewal.

On Intra-Scheme Money Transfer, sending to an account holder attracts a minimum of N50 subject to 1 percent of transaction value or N300, whichever is lower. While for a non-account holder, it attracts a minimum of N50 subject to 1.5 per cent of transaction value or N500, whichever is lower.

For individual cash deposits, the rate is two percent for transactions above N500,000 while cash withdrawal is 3 percent for transactions above N500,000.

The rate for corporate cash deposit is 3 percent for transactions above N3m while withdrawal is 5 percent for transactions N3m. Others are Status Enquiry at the Request of Customer (e.g. Confirmation Letter, Embassy Letter, Reference Letter, Letter of Indebtedness/Non Indebtedness etc.) attracts a rate of N500 per request.

Fee for Short Message Service mandatory alert is based on cost recovery from previous maximum charge of N4 – today, some banks can send four SMSs for a transaction as low as N1,200. Bill payment via e-channels will attract a maximum charge of N500 from 0.75 per cent of the transaction value subject to a maximum of N1,200. Special Request for Statement of a Bill of account is N200.

The CBN had warned then that any Financial Institution that breaches any of the provisions as contained in the guideline will pay a penalty of N2m per infraction or as may be determined by the CBN from time to time.

However, analysis of the 2021 financial statements of six Nigerian banks showed that they recorded huge increases in charges, fees and commission incomes imposed on customers.