Home Business Access Bank, GTBank, 3 Others Spent N510.37bn Maintaining Customers’ Accounts

Access Bank, GTBank, 3 Others Spent N510.37bn Maintaining Customers’ Accounts

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The likes of Access bank Plc, Guaranty Trust bank Plc (GTBank) and three other Deposit Money Bank (DBM) spent an accumulative N510.37 billion to maintain customers’ accounts in 2018.

The other three banks are Zenith Bank Plc, FBN Holdings Plc and United Bank for Africa Plc.

The five DMBs interest expenses on customers account rose 16.5by per cent from N438.24 billion reported in 2017.

The DMBs maintained current, savings and fixed accounts of customers our correspondent gathered.

Analysts said banks hike interest on customers deposit last year to match double digit inflation, stressing that attractive interest rate attracted term deposit, most especially from foreign investors.

 

A quick check revealed most banks reported increase in customers despite severe competition in winning low cost account deposit customers.

Specifically, Access bank with over N2.56 trillion deposit from customers in 2018 from N2.24 trillion in 2016 spent N125.1 billion on interest expenses on deposit from customers as against N91.36 billion reported in 2017.

Access explained that, “customer deposit grew by 14 per cent to N2.57 trillion in 2018 with low cost deposits accounting for 50 per cent.”

The bank explained further that, “CASA account deposits grew by 19 per cent to N1.3 trillion from N1.1 trillion in 2017 on the back of continued massive deposit mobilization drive for sustainable low cost deposit growth. Subsidiaries contribution accounted for 29 per cent of group deposits of N1.07 trillion in 2018 from N858.8 billion in 2017 with UK and Ghana accounting for 26 per cent of total deposit as against 25 per cent in 2017.

“FCY deposits account for 55 per cent of total deposits, on the back of increase deposit from foreign financial institutions,” the lender explained.

For last year, GTBank spent N67.98 to maintain customers deposit from N59.6 billion in 2017 while Zenith bank reported N102.2 billion in 2018, per cent increase over N107.9 billion reported in 2017.

However, the like of FBN Holdings interest expenses on deposit from customers closed last year at N109.1 billion from N101.4 billion in 2017 while, UBA reported N106 billion interest expenses on deposit from customers from N77.9 billion in 2017.

A quick check revealed that FBN Holdings;’s Total customer deposits grew by 10.9% y-o-y to ₦3.49 trillion (Dec 2017: ₦3.14 trillion).

FBN Holdings had explained that growth in deposits was driven by a 21.8per cent and 15.9per cent increase in current and savings accounts to N915.3 billion  from N751.3 billion in 2017 and N1.2 trillion (Dec 2017: N1.0 trillion) respectively.

“In addition, domiciliary deposits grew by 20.6per cent to N583.5 billion (Dec 2017: N484.0 billion).

“The continued healthy growth in the face of heightened competition underscores the confidence reposed in the Group by the public, the strength of our franchise as a time-tested financial institution. As a result, the ratio of the low-cost deposit to total deposits has further improved from 72.0per cent in 2017 to 77per cent at the Group and from 82.9per cent to 85 per cent at FirstBank Nigeria respectively.

“Furthermore, core current and savings deposits are now 77.8per cent and 88.8per cent from 68.2per cent and 80.7per cent respectively in 2017, indicating the relative stable nature of these deposits. Benefiting from our strong franchise, we are increasing the number of customers across our businesses with customers’ accounts at FirstBank currently at 15.7 million from 14.7 million in the prior year.

“We expect to continuously increase the number of customers leveraging on our agency banking network now located across the country. The retail business, with over 95per cent of total customer accounts in the books, generates approximately 67per cent of deposit base, and continues to provide very stable funding.”

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