Competition among banks grows deposits 6.6% to N34tr. Zenith, Stanbic IBTC in head to head

By Jeph Ajobaju, Chief Copy Editor

Banks have raised deposit rates 140 per cent to attract more funds from customers and address the sluggish growth in deposit in the first half of the year (H1 2021).

Among the 13 banks listed on the Nigeria Stock Exchange (NSE), Zenith Bank led the pack with 2,450 per cent jump in deposit rate in the third quarter of 2021 (Q3 2021).

Stanbic IBTC won the race for customers’ deposits with 16.9 per cent growth in H1 2021.

The fierce competition was triggered by the hike in interest rate on one-year treasury bills (TBs) to 10.1 per cent by the Central Bank of Nigeria (CBN) in H1 2021, which was 5.74 per cent in Q4 2020.

The decision of the CBN has sparked renewed preference for investment in treasury bills which is now more attractive than putting money in deposits, but it hampers the ability of banks to attract fixed deposits which had a moderate growth in H1 2021.

An analysis Vanguard did on the financial statements of the 13 banks listed on the NSE shows that customers’ deposits grew 6.6 per cent to N34.13 trillion in H1 2021 from N32.02 trillion in Q4 2020.

This has prompted most banks to raise deposit rates to spur growth in H2 2021.

The latest Deposit and Lending Rates report of the CBN shows that average deposit rates of the top 13 banks rose 140 per cent to 5.3 per cent in Q3 2021 from 2.2 per cent in Q4 2020.

The banks are Access Bank, Ecobank, FirstBank, FCMB, Fidelity Bank, GTBank, Stanbic IBTC, Sterling Bank, UBA, Union Bank, Unity Bank, Wema Bank, and Zenith Bank.

Deposit rate rise in Q3 2021 from Q4 2020

• Zenith Bank, first – 2,450 per cent to 4.75 per cent from 0.22 per cent
• GTBank, second – 457 per cent to 5.57 per cent from 1.0 per cent

• Fidelity Bank, third – 450 per cent to 5.5 per cent from 1.0 per cent
• Access Bank, fourth – 393 per cent to 9.52 per cent from 1.93 per cent

• Wema Bank, fifth – 236 per cent to 4.94 per cent from 1.47 per cent.
• Stanbic IBTC, sixth – 197 per cent to 5.52 per cent from 1.86 per cent

• Ecobank, seventh – 176 per cent to 9.67 per cent from 3.5 per cent
• Union Bank, eighth – 93 per cent to 8.28 per cent from 4.28 per cent

• Sterling Bank, ninth – 37 per cent to 9.77 per cent from 7.15 per cent
• UBA, 10^th – 33 per cent to 1.0 per cent from 1.5 per cent

• FBN Holdco – retains the same 0.15 per cent

Customers’ deposit rise in H1 2021 from Q4 2020

• Stanbic IBTC, first – 16.9 per cent to N958.4 billion from N819.9 billion
• Fidelity Bank, second – 16.5 per cent to N1.98 trillion from N1.7 trillion

• But Zenith, third – 8.1 per cent to N5.77 trillion from N5.34 trillion
• UBA, fourth – 7.4 per cent to N6.09 trillion from N5.68 trillion

• Sterling Bank, fifth – 6.7 per cent to N1.02 trillion from N951 billion
• FBN Holdco, sixth – 4.1 per cent to N5.1 trillion from N4.89 trillion

• GTBank, seventh – 4.0 per cent to N3.63 trillion from N3.51 trillion
• Union Bank, eight – 3.6 per cent to N1.17 trillion from N1.13 trillion

• Wema Bank, ninth – 0.05 per cent to N808.9 billion from N804.9 billion