Fraud in Banks Increases in 2013

Umar Ibrahim, MD, NDIC


THE Nigeria Deposit Insurance Corporation, NDIC, has said that Nigerian banking sector recorded an 11.12 percent rise in cases of financial fraud losing N5.76 billion in 2013 of which N2.5 billion was recorded in the first quarter of the year alone. The total fraud cases reported stood at 3,756 compared to 3,380 cases in 2012. The amount involved in the fraud incidences also grew to N21.79 billion in the period under review compared to N18.05 billion the previous year.

The marked increase in the number of fraud cases in the banking industry was tied to rising fraud cases through automated teller machine, ATM, internet banking, fraudulent transfers and withdrawals and suppression of customers’ deposits. These figures were contained in the 2013 Annual Report and Statement of Accounts of the NDIC, released on Tuesday, December 2, at its workshop for business editors and members of the Finance Correspondents Association of Nigeria, FICAN, in Katsina State.

The banking sector total assets grew by 17.10 percent to N28.79 trillion in 2013 compared to N24.58 trillion in the previous year, thereby leaving the sector not only adequately capitalised but also very liquid and profitable. Also, its quality of assets as reflected by the ratio of non-performing loans, NPLs, improved to 3.23 percent in 2013 compared to 3.51 percent in 2012, highlighting a favourable position when compared with the industry maximum threshold of 5 percent. Nevertheless, the industry’s volume of NPLs increased by N38.05 billion or 13.30 percent to N324.14 billion in December 2013 from N286.09 billion in 2012.

The total loans in 2013 stood at N10.04 trillion, an increase of 23.22 percent compared to N8.15 trillion in 2012. According to the report, the sector continued to benefit from the impact of purchase of NPLs by the Asset Management Company of Nigeria, AMCON, as well as improved underwriting process. It stated that seven banks accounted for 66.10 percent of total industry loans in the period under review compared to 80.73 percent in 2012.

The top seven banks included First Bank of Nigeria, Zenith Bank, Guaranty Trust Bank, GTB, United Bank for Africa, UBA, Access Bank, Ecobank Nigeria and Diamond Bank, while the remaining 18 banks accounted for 33.9 percent of industry loans.

Meanwhile, industry profit before tax rose by 5.84 percent to N484.79 billion compared to N458.04 billion the previous year. The NDIC said improvement in banks’ profitability was largely as a result of growth in interest and non-interest income as well as efficient management of interest expense. Income from interest charges increased by 23.15 percent to N1.95 trillion in 2013 compared to N1.58 trillion the previous year while non-interest income also grew by 22.99 percent to N623.66 billion compared to N507.08 billion in 2012.

Banks’ Average Liquidity Ratio stood at 50.63 percent-exceeding the prudential minimum threshold of 30 percent as at December 2013, although the ratio depicted a 13.28 percent decline over the 63.91 percent recorded in 2012. It added that all deposit money banks, DMBs, met the minimum liquidity ratio requirement for the period under review.

Sterling Bank Reward Social Media Users

Abubakar Suleiman, CFO, Sterling Bank
Abubakar Suleiman, CFO, Sterling Bank

STERLING Bank Plc has said it is ready to reward some selected social media users with $15,000 and a professional training. The bank said the move was meant to promote the good use of the various social media platforms, especially in terms of its impact on the socio-economic development of the country.

Abubakar Suleiman, executive director, strategy and finance of the bank, said the interest of the bank is to identify the opportunities offered by the new media, in order to encourage ethical use of the media. He stated these at a press conference in Lagos announcing the finalists of a voting process to determine the winners.

According to him, the winners would be rewarded at the maiden edition of the Social Media Awards Africa, SMAA. “We want to encourage people across Africa, those who are engaged either as a hobby or profession in the social media space. Also, to encourage those who are users because by working very hard to identify those who have excel in this space and by rewarding and recognising them, we are at the same time helping the users to essentially determine those who are the major players in the field,” he said.

Femi Aderibigbe, project leader, SMAA, who thanked the bank for sponsoring the award, said it was meant to discourage the wrong use of the social media space, and to promote creativity. He stressed that in spite of the rising cases of abuse on the new media, “the best way to regulate it is by rewarding those making good use of it.”

— Dec. 15, 2014 @ 01:00 GMT


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