Interest charge

Banks charge customers N715 billion for electronic transactions, others

Eleven banks charged their customers N714.61 billion for electronic fees and other forms of fees in the first nine months of 2022.

According to the banks’ nine-month financial reports, this is an increase of 16.92% from the 611.21 billion naira earned by the banks from source of income during the corresponding period of 2021.

The banks included: Zenith Bank Plc, Sterling Bank Plc and its subsidiary, Stanbic IBTC Holdings Plc, Wema Bank Plc, Fidelity Bank Plc and Union Bank of Nigeria Plc.

The others were: United Bank for Africa Plc, Unity Bank Plc, First Bank of Nigeria Holdings Plc, Guaranty Trust Holding Company and Subsidiary Companies, and Access Holdings Plc.

Fees and commissions included: credit-related fees and commissions; account maintenance fees; corporate financing costs; e-commerce revenues; asset management fees; and commission on foreign exchange transactions.

Others were: commission on contact points; shared service fees; income from financial guarantee contracts issued; account services, maintenance and ancillary banking services; and transfer charges, among others.

Among the banks, UBA (138.08 billion naira) gained the most from fees and commissions and Unity Bank (5.34 billion naira) made the least. Zenith Bank Plc earned N117.90 billion from fees and commissions; Wema Bank earned N12.02 billion; Fidelity made N25.04bn; Stanbic IBTC made N72.47 billion; The Union made 12.65 billion naira; Sterling earned N19.84 billion; Access made N133.49bn; GTCO made N66.94 billion; and FBN made N110.84bn.

According to Access Bank, fees and commissions are the fees charged for providing services to customers transacting on the group’s alternative channel platform and on the various debit and credit cards issued for the purpose of such payments.

He said: “They are charged to the group on services rendered on online banking platforms, mobile banking and online purchases. The corresponding revenue lines for these expenses include card revenue (foreign and local cards), online purchases, and bill payments included in fees and commissions.

The Central Bank of Nigeria created new guidelines for bank charges on January 1, 2020. The new guideline mainly impacted card maintenance fees, fees for hardware tokens and the amount that can be paid for electronic transfers.

According to the President of the Bank Customers Association of Nigeria, Uju Ogubunka, banks were earning a lot on bank charges, which overwhelmed bank customers.

In a previous interview with the punch, He said: “The issue of excess fees has been a major source of concern for us as an association. We’ve been fighting it ever since and we won’t stop.

“However, I have to say that in most cases the additional charges imposed on bank customers are not deliberate but the result of a capacity building problem. This is when new recruits or inexperienced hands handle trades and overcharges.

“Furthermore, most of the time when banks overcharge, they are forced to reimburse customers with prime interest plus two percent.”