New Telegraph

Banks garner N28.8trn customer deposits in nine months

Amid the coronavirus (COVID-19) pandemic, Deposit Money Banks (DMBs) in the country saw a significant increase in customer deposits in the first nine months of  this year, 9M 2020 results released by the lenders show.

 

New Telegraph’s analysis of 11 lenders’ 9M 2020 financial statements, for instance, shows that they grew their total customer deposits to N28.8 trillion in the first nine months of this year from the N23.5 trillion that they reported at the end of last year.

 

The banks are Access Bank, Zenith Bank, United    Bank for Africa (UBA), FBN Holdings, Guaranty Trust Bank (GTB), Fidelity Bank, Union Bank, Stanbic IBTC, Sterling Bank, Wema Bank and Unity Bank.

 

 

 

 

A breakdown of the results indicate that Nigeria’s biggest lender by assets, Access Bank, raked in the most customer deposits of N5.26 trillion in the first nine months of this year compared with N4.3 trillion it reported for the end of 2019. It was followed by Zenith Bank, which garnered customer deposits of N5.24 trillion in the first nine months of 2020, as against the N4.3 trillion the Tier 1 lender reported for the same period in the previous year.

 

Similarly, UBA posted customer deposits of N5.20 trillion in the first nine months of this year, indicating a 35.7 percentage increase over the N3.8 trillion the lender reported at the end of 2019. FBN Holdings’ 9M 2020 results put the lender’s customer deposits at N4.6 trillion as against the N4.01 trillion it reported at the end of last year.

 

Also, GTB reported customer deposits of N3.2 trillion for the first nine months of this year, which is an increase of 26.01 per cent over the N2.5 trillion it recorded for the end of last year.

Leading Tier 2 lender, Fidelity Bank, led its peers with customer deposits of N1.5 trillion in the first nine months of this year compared with the N1.2 trillion it reported for the corresponding period of last year. Union Bank’s 9M 2020 financial statements equally shows a significant increase in customer deposits to N1.1 trillion from N886.3 billion that the lender reported at the end of the 2019 financial year.

 

The customer deposits figure of N951.8 billion reported by Sterling Bank for the first nine months of this year was 6.6 per cent more than the N889 billion, the lender recorded for the end of December last year.

 

At N751.8 billion, Stanbic IBTC’s customer deposits for the first nine months of this year increased by 18 per cent when compared with the N637.8 billion the lender re- ported at the end of last year.

 

Wema Bank recorded customer deposits of N702 billion in its 9M 2020 results as against the N456.8 billion it reported in its 2019 end of year financial statement. Unity Bank’s 9M 2020 results show that customer deposits increased to N332.4 billion from N257.7 billion in the same period of last year.

 

Further review of the 11 lenders’ 9M 2020 financial statements, indicates that Tier 1 lenders – Access Bank, Zenith Bank, UBA, FBN Holdings and GTBank – accounted for N23.5 trillion of the N28.8 trillion total customer deposits that the DMBs garnered in the first nine months of this year.

 

In its economic report for Half Year 2020, the Central Bank of Nigeria (CBN) stated that: “The structure of the Nigerian banking industry remained oligopolistic in the first half of 2020, with the concentration ratios of the largest six banks (CR6) at 68.1 in deposits and 65.2 in assets.

 

“As in the corresponding half of 2019, there was no dominance of a single bank, as the share of the largest bank in deposits and assets stood at 14.6 per cent and 14.3 per cent, respectively compared with 14.9 and 13.2 per cent in the first half of 2019.

 

“Fourteen banks had percentage shares ranging from 0.1 to 5.1 per cent in deposits and 0.1 to 5.2 per cent in assets, compared with 0.1 to 4.3 per cent and 0.1 to 4.2 per cent, respectively in the corresponding period of 2019.”

 

Although fierce competition for deposits in the industry, as well as from Fintechs has, in recent years, compelled lenders to devise effective deposit mobilisation strategies, there was speculation in some quarters that with the COVID-19 crisis severely affecting economic activity and triggering massive job losses, lenders would struggle to mobilise customer deposits, especially as a lot of depositors were already complaining about the low interest rates banks pay on savings accounts

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