Nine deposit money banks earned a total of N418.52 billion from fees and commissions in full year 2017, representing 8.09 percent increase over N387.18 billion earned in the corresponding year of 2016, BusinessDay investigation show.
This comes as customers continue to groan under what they refer to as excess charges by lenders.
Fees and commissions revenue also constitutes bank charges such as account maintenance fees, stamp duty, commission on turnover (COT) and SMS alerts, among others.
A tier one bank with total asset size of N4.10 trillion as of 2017 made N6.45 billion from account maintenance charges and handling commission in full financial year ended December 2017, indicating a 147.12 percent increase from N2.61 billion in 2016.
Another systemically important bank recorded a 64.32 percent increase in account maintenance fee to N27.7 billion in full year 2017 financial result compared to N16.9 billion recorded in the previous year.
Nigeria’s second largest bank by total asset earned N24.98 billion from electronic banking fees in 2017, which was an increase of 14.43 percent compared to N21.83 billion in 2016, data from the annual report of the company revealed. However, its account maintenance fee declined to N6.69 billion in 2017 from N15.62 billion in 2016.
BusinessDay visited some traders who transact millions of naira worth of business and they complained bitterly about excess charges and threatened to close their accounts if such deductions continue.
“If it is a crime to operate current account, they should let us know,” Eruba Rapheal, a tier two bank customer who deals in Christian bibles and books told BusinessDay.
Rapheal showed BusinessDay the alerts he receives from his bank twice weekly, which reads: “under charge Cenbank Comm September 2017”. The alert was sent to him on April 23, 2018 and the charge was N100.
The Central Bank of Nigeria (CBN) stated in the Guide to Bank Charges circular to all banks and other financial institutions that current account maintenance fees are negotiable subject to a maximum of N1 per million.
The circular allows banks to charge N50 monthly as debit/credit card maintenance fee.
The circular explained that Current Account Maintenance Fee (CAMF) is applicable to current accounts only in respect of customer-induced debit transactions to third parties and debit transfers/lodgements to the customer’s account in another bank. However, the CAMF is not applicable to Savings Accounts.
“It is unfortunate that what attracted me to my Bank has long been eroded. I operate a savings and current accounts with the bank, although I have other bank accounts but the arbitrary deductions from my current account are very alarming. I have paid several visit to the Apapa branch of the bank to complain but no reversal has been made, and the most sad part is that the bank’s staff cannot do anything about it,” said a customer who lives at Ago Palace area of Lagos but works in Apapa.
Continuing he said “my next move if they refuse to reverse the wrong deduction is to report them to the Central Bank and the Consumer Protection Council (CPC), because from every indication they are not likely to reverse it as the wrong deduction started over a year ago”.
“However, if they refuse to correct this anomaly, I will have to close down the two accounts I have with them,” the customer said.
Uche Uwaleke, professor of Finance and head of department, Banking and Finance, Nasarawa State University, said the CBN should further enhance surveillance on banks, noting that the CBN has sanctioned banks but some unfair charges keep recurring.
He said the development puts a lot of responsibility on banks customers to make their complaint to customer service, where banks fail to resolve the issue, the customers has recourse to the CBN.
Uwaleke called on the Central Bank to step up action against deposit money banks that are notorious in excess charges.