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10 commercial banks record N463.68bn in non-interest income

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Not less than 10 Deposit Money Banks (DMBs) operating in the country have reported a total sum of N463.68billion in non-interest income amid Foreign Exchange (FX) income, weak revaluation gain on FX income and transaction fees. The affected banks in half year of 2017 reported an increase of N18.37 billion or 4.1 per cent increase in non-interest income from N445.31 billion in six months of 2016.
 
Financial institutions non-interest income are generated primarily from fees including deposit, transaction fees and FX revaluation gains with the likes of Guaranty Trust Bank Plc (GTBank) reporting a significant drop of about 90 per cent in FX revaluation gain.
 
NEWSVERGE checks showed that Access Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, and Diamond Bank Plc benefitted from FX income that comprises of trading 
income on foreign currencies as well as gains from revaluation of trading position. For Instance, Access Bank’s for the six months of 2017 reported N84.4 billion in non-interest income as against N61.7 billion reported in six months of 2016.
The Bank attributed the growth to strong  year on year (y/y) increase in net trading income of N55.4billion (+152 per cent y/y) driven by increase in the Bank’s foreign exchange income resulting from trading activities.
For Zenith Bank, Non-Interest income moved from N33.04 billion to N118.18 billion while United Bank for Africa‘s non-interest income gained 16 per cent to N60.39 billion in six months of 2017 from N52.06 billion in six months of 2016.
United Bank for Africa in a statement said, the Bank recorded double digit growth in Non-interest income, contributing some 30 per cent of gross earnings, as increased foreign currency liquidity enhanced FX trading income.
In addition, Diamond Bank’s non-interest income rose by 23.4 per cent to N61.7 billion from N50 billion in prior six months of 2016 and Wema Bank Plc’s non-interest income increased by 22 per cent to N5.01 billion from N4.11 billion in six months of 2016.
The MD/CEO, Wema Bank, Mr. Segun Oloketuyi said, “Despite the relatively tough climate, Wema Bank recorded success on a number of financial and non-financial priorities. Specifically, Gross Earnings recorded stable growth, increasing by 25.17 per cent from N24.26 billion (H1’2016) to N30.37 billion (H1’2017).
This growth resulted from a 25.84per cent increase in interest income to N25.37 billion and a 21.92per cent rise in non-interest income where we continue to see impressive growth, led by income from our mobile and digital banking offerings.” With the likes of GTBank, Fidelity Bank Plc, First Bank of Nigeria Holdings Plc, Sterling Bank Plc and Union Bank of Nigeria Plc, reporting drop in non-interest income, analysts said macro economy challenges impacted negatively on trading activities of banks.
However, GTBank’s non-Interest Income dropped by 51.8 per cent to N48.2 billion from N100.1 billion due to decline in foreign exchange income (FX revaluation gains).
First City Monument Bank (FCMB) Group Plc reported, non-interest income of N12.8 billion, for the six months ended June 2017, a decrease of 51 per cent year-on-year, from N26 billion for the same period prior year, primarily due to the non-recurrence of foreign exchange revaluation gains.
Other banks that reported decline in non-interest income include FBN Holdings Plc, Sterling Bank Plc and Union Bank of Nigeria Plc. Of the four banks, FBN Holdings non-interest income dropped by 46 per cent to N50.5 billion from N94.1 billion in six months of 2016 while Sterling Bank’s non-interest income slump by 16.5 per cent from N8.5 billion to N7.1 billion in six months of 2017. With a marginal drop of 1.9 per cent, Union Bank of Nigeria reported N15.4 billion in non-interest income from N15.7 billion in prior six months of 2016.
 
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