In recent times, Banks have been at the receiving ends of the CBN’s policy changes, the latest being the new guideline which slashes bank charges across payment and transaction channels. In our view, this is a further attempt to compel banks to lend to the private sector and support overall economic growth. In line with recent pro-growth policies, the CBN reviewed downwards, charges by banks and other financial, as well as non-bank financial institutions, effective January 1st, 2020.
Notable highlights of the include: Electronic funds transfer:
· N10 for interbank transfers less than N5,000 (previously: N50 flat)
· N25 for interbank transfers between N5,001 and N50,000 (previously: N50 flat)
· N50 for interbank transfers above N50,000 (previously: N50 flat)
· Maximum of N35 ATM charges after third withdrawal within the same month (previously: N65)
· No charge for debit cards linked to the current account
· Maximum of N50 per quarter for cards linked to savings account (previously: N50/month)
Prior to the new guideline, we had expected banks fee-based income to be stable and reduce the expected impact of lower interest income in 2020. However, with the latest regulation, 2020 is going to be tough for the Bank as all revenue lines maybe under pressure. In our opinion, this will compel the bank to seek lending outlets to shore-up interest income.
United Capital Research
