Nigerian banks are dropping floor within the digital funds race, with income from digital enterprise channels declining by 3.7 p.c within the first half (H1) of 2025, highlighting fintechs’ rising dominance and the lingering downside of service downtime.
BusinessDay’s evaluation of seven listed banks’ half-year earnings exhibits a blended image. Some lenders like FCMB Group, Zenith Financial institution, Warranty Belief Holding Firm (GTCO), and United Financial institution for Africa (UBA) reported declines, whereas First HoldCo, Stanbic IBTC Holdings Plc, and Sterling Monetary Holding Firm recorded development in e-business earnings.
The banks collectively reported N223.8 billion in H1’ 2025, in comparison with N232.4 billion in the identical interval of final 12 months.
Analysts attribute this uneven efficiency to a mixture of extended community disruptions, regulatory pressures, and competitors from fintech gamers.
Olumide Sole, head, Monetary Establishments Analysis, Renaissance Capital Africa, stated that throughout the interval of system upgrades, some banks skilled downtime on their e-banking apps.
“At these moments, clients rapidly migrated to fintech platforms, which have been out there and dependable. Fintechs didn’t smuggle themselves in; they merely provided a greater expertise.”
Decliners
Information gathered by BusinessDay present that FCMB Group, GTCO, Zenith Financial institution, and UBA declined essentially the most by 30 p.c, 12 p.c, 11.8 p.c, and 5.2 p.c, respectively.
The dip in e-business earnings raises questions on how ready banks are to compete in a quickly digitising financial system.
E-business has traditionally been a robust income line for banks, usually serving to to cushion pressures from curiosity earnings. A sustained decline may squeeze profitability additional, particularly in a high-cost working atmosphere, specialists say.
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“The way forward for funds in Nigeria is being contested. Banks nonetheless dominate by way of transaction worth, however fintechs are quickly outpacing them in transaction quantity and buyer stickiness,” stated Sole.
Nonetheless, banks like FirstHoldCo (25.1 p.c), Stanbic IBTC (4.65 p.c), and Sterling HoldCo (2.78 p.c) benefited from the Central Financial institution of Nigeria (CBN )’s new withdrawal prices.
The CBN stated the adjustments have been a part of broader reforms to align transaction prices with operational realities, in keeping with a round signed by John S. Onojah, performing director, Monetary Coverage and Regulation.
Downtime takes toll
Within the third quarter (Q3) of 2024 and the primary quarter (Q1) of 2025, many Nigerian banks, together with GTB and Wema, undertook important core banking software program upgrades to modernise their operations and improve buyer experiences.
System upgrades in Nigerian banks usually result in glitches resulting from unrealistic deadlines set by CEOs aiming to scale back prices, in keeping with a senior data safety official at a significant Nigerian financial institution, who requested to not be named to talk freely.
“These tight schedules make it tough to keep away from errors and vulnerabilities, and prolonging the improve makes it dearer for them.”
Daba Omoregbee, a X consumer on September twentieth, lamented her frustration on a financial institution’s platform, asking the monetary establishment to “go and repair your customer support.”
The X consumer complained that transferred funds from the financial institution’s app weren’t delivered, and the financial institution didn’t hassle to tell clients that there was downtime.
The CBN has repeatedly expressed concern over frequent downtimes on banks’ platforms. Prospects have usually confronted failed transfers, delayed reversals, and inaccessible cell app experiences which undermine confidence. Every downtime episode interprets to misplaced transaction volumes and, finally, shrinking e-business earnings.
“Service reliability has change into a key differentiator. Each time banks go down, fintechs like Opay, PalmPay, and Moniepoint are the fast alternate options for patrons. Individuals not wait; they change,” stated a Lagos-based funds guide.
Fintech seen successful the cost race
In keeping with the Nigerian Interbank Settlement System (NIBSS), the worth of cell cash transactions grew by 20.3 p.c to N20.7 trillion in Q1’25 from N17.2 trillion in Q1’24.
For tens of millions of Nigerians, fintech apps have change into the default for on a regular basis transactions, from invoice funds to peer-to-peer transfers. This development is mirrored within the monetary statements of a number of prime fintechs.
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Kuda Applied sciences, Nigeria’s digital financial institution, revealed that it processed N14.3 trillion price of transactions throughout greater than 300 million dealings in Q1 of 2025.
Babs Ogundeyi, firm’s CEO, broke down the numbers as they associated to retail and enterprise banking platforms.
In keeping with him, N8.5 trillion was generated from retail banking customers, whereas enterprise purchasers contributed N5.8 trillion.
Transfers, which stay largely free for customers, proceed to dominate exercise on the platform, with enterprise banking alone accounting for N1.5 trillion in transfers. Notably, the financial institution reported extra paid transfers than free ones, signaling that Nigerian customers are more and more keen to pay for comfort when sending cash.
Banks innovate
Banks’ fintech arm, GTCO HabariPay and Entry Hydrogen, additionally took giant slices of fintech income.
In Q1’ 2025, Entry Hydrogen’s after-tax revenue surged by 466 p.c to N283 million, up from N50 million in the identical interval of 2024.
However, GTCO’s HabariPay elevated its revenue 12-fold in three years, reaching a file N4.02 billion in H1 2025 from N322.9 million in H1 2022, in keeping with GTCO’s six-month monetary statements.
