• Business - Banking & Finance
  • Updated: August 26, 2020

PWC, KPMG Obtained NGN4.1bn From Nigeria's Five Biggest Banks In 2019

PWC, KPMG Obtained NGN4.1bn From Nigeria's Five Biggest Bank

In 2019, the finances of Nigeria's five biggest banks were independently audited by two foreign auditing firms, KPMG Professional Services and PricewaterhouseCoopers (PWC). Together, these auditing firms bagged NGN4.18 billion in the full-year of 2019 for their audit services rendered within twelve months.

Access Bank, GTBank, Zenith Bank, UBA and First Bank contributed the NGN4.18 billion to the purse of the two auditing firms, with PricewaterhouseCoopers accounting for the largest share of the earnings as PWC offered its auditing services to four of the Big Five banks.

The Big Five are determined by their market capitalisation in the stock market. According to the Nigerian Stock Exchange (NSE), GTBank is the most valuable bank in Nigeria worth 737.2 billion, while Zenith Bank holds the second largest market share with 532.1 billion, Access Bank is far behind with 227.4 billion, UBA comes fourth on the chart with 220.5 billion and First Bank places fifth with 181.2 billion.

The auditing service ran through Q1, Q2, Q3, and Q4 of last year. However, note that these auditing firms offer their services for 10-years straight to a single entity in the banking sector before they are rotated in line with the Central Bank of Nigeria (CBN) and Securities Exchange Commission (SEC) Codes of Corporate Governance.

[READ ALSO: Deloitte, PWC Generate Over NGN180m From Dangote Cement, BUA Cement In Q2]

Which Bank Changed Auditing Firms This Year

According to the regulatory requirement, First Bank and PWC didn't renew their agreement. PWC had acted as auditors for FBN Holdings Plc and First Bank of Nigeria Limited, for eight and ten consecutive years respective. In the financials of First Bank, it was stated that "In line with paragraph 5.2.12 of the CBN Code of Corporate  Governance, the auditors have indicated that they will not be seeking re-appointment as auditors of both FBN Holdings Plc and First Bank of Nigeria Limited."

A new auditor, KPMG Professional Services, was appointed by First Bank to replace PWC in 2020. Also, UBA's auditing agreement with PWC elapsed in 2019 having completed the required 10-years, "In line with section 20.2 of the Nigerian Code of Corporate Governance 2018, Messrs. PricewaterhouseCoopers will be disengaged having completed 10 years of continuous service."

Note that despite employing the services of independent auditors, these banks also have their in-house auditing committee that audits their books as done by external auditors - however, it is a requirement for companies to allow independent auditors to go through their finances.

How Much Auditing Firms Earned From Big Five Banks Each

The NGN4.1 billion generated by PWC and KPMG is split amongst Access Bank, GTBank, Zenith Bank, UBA, and First Bank. But PWC accounted for the auditing fees of GTBank, First Bank, UBA and Access bank, grossing NGN3.2 billion from the four banks.

[READ ALSO: Nigerian Banks To Become Collection Agents For Electricity Payment]

PWC: The largest auditing fee paid by a lender in 2019 was done by First Bank Holdings, to KPMG. Out of the Big Five, only First Bank - the fifth largest Nigerian bank by market value - passed the billion naira mark, after paying about NGN1,009 billion for the twelve months or quarterly services that KPMG offered, surpassing the NGN910 million it paid in the corresponding period of 2018.

GTBank increased the NGN791.3 million it paid PWC in 2018 to NGN857.8 million in the period under review which is 2019 - making it the third-highest audit fee last year by a Nigerian bank. Meanwhile, the highest increase in payment was done by Access Bank, which paid PWC NGN612.9 million in 2019, higher than the NGN819.9 million it paid in 2018.

UBA's auditor's remuneration also increased to a significant extent, but it also didn't reach or surpass the billion naira mark, as it paid PWC NGN608 million last year, topping the NGN592 billion it paid to the auditing firm in 2018.

KPMG: AllNews gathered that Zenith Bank paid PricewaterhouseCoopers over NGN892 million for its 2019 auditing service. This makes it the second-highest payment by a bank in 2019. The second-largest market shareholder in the banking industry increased the auditor's remuneration from the NGN822 million it paid in the corresponding period.

Related Topics

Join our Telegram platform to get news update Join Now

0 Comment(s)

See this post in...


We have selected third parties to use cookies for technical purposes as specified in the Cookie Policy. Use the “Accept All” button to consent or “Customize” button to set your cookie tracking settings