Leading banks in Nigeria have reported a significant rise in income from fees they charge customers for use of their various electronic banking services, principally, transaction alerts, Automatic Teller Machine (ATM) services and money transfers among others.
The top 10 banks earned N138 billion as at end 2016, up by over 26 per cent from N109.1 billion in 2015. Total industry figure is expected to be over N160 billion and over 30 per cent year-on-year jump. Reacting, organized labour declared the e-transaction charges as not only outrageous, but also a corporate extortion, pleading with the Central Bank of Nigeria, CBN and other regulatory agencies in the financial sector to intervene before it gets out of hand.
While top executives of banks told Financial Vanguard that the development was not only inevitable given the massive refocusing of business models from interest income to non-interest income by almost all the banks in the past two years, they added that in the current year and in the years ahead the figures will be far higher since, according to them, bank customers are also buying into the services increasingly.
Financial Vanguard investigations also revealed that the shift to non-interest income by banks was partly a result of huge bad loans and subsequent losses incurred by banks who were largely into interest income businesses, principally, credit creation. However, bank customers and other non-operator stakeholders appear unhappy with the development as they accuse the banks of profiteering at the expense of customers who should have received the services as part of what the banks are obliged to render at no extra cost.