Banking Sector

Nigerian Banks in Crisis: Fraud Cases Soar, Totaling N12.33 Billion

Published

1 month ago

August 25, 2023

A recent report by the Financial Institutions Training Center (FITC) has exposed a staggering surge in fraud cases.

These nefarious activities have collectively drained an alarming N12.33 billion from the nation’s financial institutions in the first half of 2023.

The FITC report, titled “Reports of Fraud and Forgeries in Nigerian Banks (Quarter 2, 2023),” paints a bleak picture of the challenges faced by the banking industry in Nigeria. Mobile fraud, computer/web fraud, and Point of Sale (POS) fraud have emerged as the principal culprits behind this alarming trend.

During the second quarter of 2023, FITC received a total of 71 reports of fraud and forgery from 24 deposit money institutions. These figures reveal an escalation in fraudulent activities, with 24 reports coming in April, 23 in May, and 24 in June, indicating a relentless assault on the financial sector.

Perhaps even more disconcerting is the comparison to the preceding quarter. While the first quarter of 2023 reported 12,553 cases of fraud, there was a slight reduction to 11,679 cases in the second quarter.

This decline, however, offers no respite as mobile fraud, computer/web fraud, and POS-related fraud continue to grip the industry.

The financial implications are equally alarming. FITC’s report highlights an astounding 276.98 percent increase in the total amount involved in fraud cases during Q2 2023 when compared to the previous quarter.

The figures surged from N2.58 billion to a daunting N9.75 billion. Equally distressing is the escalation in losses, which skyrocketed by 1125.03 percent, climbing from N472 million in Q1 2023 to a staggering N5.79 billion in Q2 2023.

An analysis of the data reveals a shift in the dynamics of these fraudulent activities. While outsider involvement in fraud cases dropped by 6.40 percent in Q2 2023, with the number falling from 12,351 cases in the previous quarter to 11,561 cases, there was an alarming 22.22 percent increase in staff involvement, rising from 72 cases in Q1 to 88 cases in Q2 2023.

The consequences of this surge in fraudulent activities have been dire. A total of 26 individuals have faced termination of employment due to their involvement in fraudulent activities in the first half of this year. Also, the second quarter of 2023 witnessed a substantial increase in fraudulent loans, accounting for N6.03 billion.

Breaking down the fraudulent activities by category, fraudulent loans topped the list at N6.03 billion (61.86 percent), followed by computer/web fraud at N1.47 billion (15.10 percent), mobile fraud at N751 million (7.7 percent), and fraudulent withdrawals at N663 million (6.79 percent).

FITC’s report also highlights the channels through which these fraudulent activities occurred, including ATMs, online platforms such as web and mobile banking, bank branches, and point-of-sale terminals.

Moreover, the report underscores the financial burden placed on the banks themselves, stating, “The increase might be attributed to the fact that banks were liable for the losses incurred and had to make refunds to customers.”

In response to these alarming statistics, FITC has urgently called upon Nigerian banks to bolster their security protocols and systems to prevent unauthorized access to customer accounts and safeguard sensitive information.

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Banking Sector

Access Bank, Others Collect N154 Billion in Electronic Banking Fees in H1’23, a 16.7% YoY Surge

Published

4 days ago

September 28, 2023

Samed Olukoya

In the first half of 2023, customers of Nigeria’s top nine commercial banks paid a whopping N154 billion in fees for utilizing electronic banking services, reflecting a robust 16.7% year-on-year increase compared to H1’22’s N131.97 billion.

The data, extracted from the financial statements of these banks, underscores the escalating trend of Nigerians embracing electronic payment channels.

Leading the pack in revenue generation from these fees is Access Bank, amassing N43.9 billion, followed by United Bank for Africa Plc (N51.07 billion), Zenith Bank (N22.27 billion), Guaranty Trust Bank (N21.2 billion), and others like Stanbic IBTC (N2.14 billion), First City Monument Bank (N7.4 billion), Unity Bank (N1.96 billion), Fidelity Bank (N1.85 billion), and Wema Bank (N3.13 billion).

Electronic banking services encompass a gamut of options, including internet banking, mobile banking, ATMs, and Point of Sale (PoS) systems.

Recent data from the Nigerian Interbank Settlement System (NIBSS) for Q1’23 indicates a substantial surge in electronic transactions.

Transaction volume increased by 209% YoY to 4.7 billion, and transaction value grew by 48% YoY to N137.52 trillion.

The nine banks collectively raked in N66.7 billion in account maintenance fees and commissions during H1’23, reflecting a 14.7% YoY rise.

Zenith Bank led this category with N21.02 billion, trailed by Access Bank (N13.36 billion), Guaranty Trust Bank (N10.5 billion), and United Bank of Africa (N9.6 billion).

Overall, the banks’ cumulative net fees and commission income registered a substantial 20.7% YoY growth, reaching N448.47 billion in H1’23 from N371.43 billion in H1’22.

Banking Sector

Access Holdings Posts 52.6% Profit for the First Half of the Year

Parent Company of Access Bank Celebrates Remarkable Financial Performance in H1’23

Published

6 days ago

September 26, 2023

Investors King

Access Holdings Plc, the parent company of Access Bank, has reported a 58.9 percent surge in gross revenue to N940.3 billion for the first half of 2023.

The financial services giant also recorded remarkable growth in Profit Before Tax (PBT) and Profit After Tax (PAT) at 71.4 percent and 52.6 percent, respectively, culminating in N167.6 billion for PBT and N135.4 billion for PAT during the same period.

These financial milestones were unveiled as part of Access Holdings’ Audited Consolidated and Separate Financial Statements for the period concluding on June 30, 2023.

The driving force behind this unprecedented growth can be attributed to a potent combination of factors. A 63.0 percent growth in interest income and a 51.9 percent increase in non-interest income fueled the surge in gross revenue.

Access Holdings also witnessed a 35 percent year-to-date growth in customer deposits, capping the first half of 2023 at an impressive N12.5 trillion. This remarkable achievement encompassed all business segments, reinforcing the Group’s status as Nigeria’s largest financial institution by total assets.

The company’s total assets grew by 39.0 percent year-on-year to N20.9 trillion while shareholders’ funds surged by 40.6 percent to N1.7 trillion.

These astounding figures underline the Group’s ability to generate value from a diversified business portfolio, spanning banking, asset management, and payment services.

Herbert Wigwe, the Group Chief Executive Officer of Access Holdings Plc, commented on the company’s positive performance, saying, “Our growth plans for the African continent remain firm and clear, driven by the strong long-term growth prospects and trade opportunities seen across many of the countries.”

He went on to emphasize the company’s commitment to its 5-year cyclical strategy, stating, “Our primary objective remains to transform Access Holdings Plc into a leading financial and ecosystem player, fostering opportunities for shared prosperity among all stakeholders.”

Banking Sector

Central Bank of Nigeria Postpones 293rd Monetary Policy Committee Meeting

Published

1 week ago

September 22, 2023

Investors King

The Central Bank of Nigeria (CBN) has announced the postponement of its 293rd Monetary Policy Committee (MPC) meeting, originally scheduled for September 25th and 26th, 2023.

Dr. Isa AbdulMumin, the bank’s Director of Corporate Communications, released a statement on Thursday confirming the decision.

In the statement, Dr. AbdulMumin stated, “The Monetary Policy Committee of the Central Bank of Nigeria has deferred its 293rd meeting, which was initially planned for Monday and Tuesday, September 25th and 26th, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”

While the CBN did not provide an official reason for the postponement, some industry experts suggest it may be related to the pending approvals for the newly appointed governor and deputy governors of the bank.

President Bola Tinubu recently nominated Yemi Cardoso as the potential head of the CBN. Additionally, Tinubu has endorsed the nominations of four new deputy governors for the apex bank, who are expected to serve for an initial term of five years, pending confirmation by the Senate.

The nominated deputy governors are Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor, and Bala Bello. However, the appointment of the CBN governor is contingent upon Senate confirmation, which is currently on a yearly recess.

The CBN assures stakeholders and the public that the rescheduled MPC meeting date will be communicated promptly as soon as it is confirmed.