How bank’s fintech arms performed in Q1

GTCO’s HabariPay, Access Hydrogen Payment Service, and Zest Payment Services Limited reported strong performances in the first quarter of 2024 as more Nigerians embraced digital payment.

BusinessDay’s findings showed that the listed fintech subsidiaries of these Nigerian banks recorded a rise in profits due to increased use of their payment gateways, switching verticals, and bill payments, among other things.

In Q1 2024, GTCO’s fintech subsidiary, HabariPay, reported a profit after tax of N1.09 billion. Access’s Hydrogen reported N50 million, and Zest Payment Limited, formerly known as Stanbic IBTC Financial Service Limited, reported an after-tax loss of N436 million.

In May 2023, Stanbic IBTC Holdings joined the ranks of banks launching a fintech business, following in the footsteps of other financial institutions like HabariPay and Hydrogen Pay. Although the banks’ startups are still in their infant stages, their ambitions are enormous.

Segun Agbaje, GTCO’s group chief executive officer, said the plan was to push HabariPay to unicorn levels soon. HabariPay carries out its payment operations through Squad.

Access’s Hydrogen services include lending, physical and virtual payment card issuance, fraud detection, recurring payments, storefront management, inventory management, accounting, and bookkeeping.

These banks are starting to see results from their splash on fintech. According to GTCO’s financial report, Squad, which began operations in June 2022, reached a milestone in January 2023 as it crossed N200 billion in monthly transactions.

The platform also became profitable in its first month of operations. Experts attribute the progress of the banks’ fintech subsidiaries to their focus on retail banking strategies.

GTCO has invested in food and clothing bazaars, drawing large crowds of small businesses and consumers. These festivals encourage consumer spending and expose GTCO brands and services to new customers, Kaliba Bilala, founder of Tanabit, said.

Ifeanyi Caleb, a financial analyst, added, “Investors and the public often perceive bank-backed fintechs to be more stable and less risky than standalone fintech startups. It’s a major valuation advantage to them.

“Most investors are now interested in revenues and profit instead of gross processed value. Access to free/cheap investors’ funds is no longer the same as they now demand for short-term returns.”

Bank analysis

Habari Pay

HabariPay, the fintech subsidiary of Guaranty Trust Holding Company (GTCO), reported N1.09 billion profit after tax in Q1, 2024, up 72.4 percent from N632 million in the corresponding period of 2023,

The fintech operating income rose to N1.4 billion from N1.03 billion. At the same time, its operating expenses dropped to N307 million from N386 million reported during the reviewed periods.

Hydrogen Payment

Hydrogen, Access Corporation’s fintech subsidiary, recorded an after-tax profit of N50 million, compared to a negative N612 million reported in the same period last year.

The fintech operating income rose to N594 million from N41 million. At the same time, its operating expenses dropped to N543 million from N653 million reported during the reviewed periods.

Zest Payment

Zest Payment Limited, formerly known as Stanbic IBTC Financial Service Limited, reported an after-tax loss of N436 million in Q1’24, up from a loss of N150 million in the same period of 2023.

The fintech’s total income rose to N33 million from N4 million, while its operating expenses increased to N469 million from N154 million.