E-Financial
Cases of Banks’ Frauds on the Rise-NDIC
Nigeria Deposit Insurance Corporation (NDIC) yesterday released its 2012 report and statement of accounts, which showed that banks in the country reported a total of 3,380 cases of frauds involving a ₦17.97 billion loss to the industry.
Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution.
The reported cases of frauds represents a 43.7 per cent rise compared to 2,352 cases in 2011 while the expected/contingent loss rose by ₦455 million (10.9 per cent) from ₦4.072 billion reported in 2011.
The expected/contingent loss in 2011 however fell by 36.4 per cent from ₦28.40 billion in 2011, to ₦18.04 billion last year.
The corporation, however, noted the significant improvement in the financial standing of the nation’s banks in 2012, as they (banks) pooled a total of N525.34 billion pre-tax profit compared with the N6.71 billion loss reported at the end of 2011.
The return to profit, as contained in the 2012 NDIC report and audited statement, according to a statement by the corporation, was helped by the improved capitalisation resulting mainly from the activities of the Asset Management Corporation of Nigeria (AMCON), which acquired toxic assets in the industry.
This acquisition led to healthier balance sheets for the banks.
As a further sign of the improved health condition of the banks, the NDIC said the industry’s total assets improved by 10.91 per cent from N21.89 trillion in 2011 to N24.58 trillion in 2012.
Total loans and advances at N8.15 trillion represented a third of total assets, out of which 54.97 per cent or N4.48 trillion went to the real sector of the economy, compared with N3.88 trillion (or 53.37 per cent) and N3.51 trillion (or 48.95 per cent) in 2011 and 2010, respectively.
“Of particular note was the rising trend in the banking industry’s credits to the agric sector which stood at 3.60 per cent of total loans and advances in 2012 compared to 2.15 per cent and 3.11 per cent recorded in 2010 and 2011, respectively,” the statement added.
The corporation also expressed grave concern over the failure to assess financial condition and performance of 555 micro finance banks (MFBs) in the country on a continuous basis during the year.
It said in 2012, “310 out of the 323 MFBs that rendered returns had met the minimum paid-up capital of N20 million. A total of 302 MFBs had capital adequacy ratio of more than 10 per cent.”
Also, the NDIC said it has so far paid N73.58 billion as liquidation dividend to 250,209 depositors of banks that went under over the years, up to December 31, 2012.
Of this amount, the corporation said it paid a cumulative N6.82 billion to 528,212 insured depositors of closed banks by December 31, 2012, compared with N6.68 billion paid to 527,942 depositors in 2011.
The 2012 payout and beneficiaries could have been higher, the NDIC said, but for the unwillingness of many depositors to file their claims.
“It is pertinent to indicate that a total of 14 out of the 34 banks-in-liquidation prior to 2006 had declared a final dividend of 100% of their total deposits, indicating that all depositors of the affected closed banks had fully recovered their deposits,” the NDIC said.
The report further rated one of the nation’s existing 20 banks “marginal,” while 10 are “sound” and nine others “satisfactory,” following which the corporation concluded that “the industry could be considered to be relatively stable in 2012 (as there) was no unsound bank in the banking industry as at 31st December, 2012.”
Stakeholders in the banking and financial ecosystem, yesterday, decried the surge in cyber fraud as Deposit Money Banks (DMBs) lost N10 billion in the second quarter of 2023, representing almost 300 per cent year-on-year compared to the previous year.
At a Mastercard forum convened to tackle fraud and cybersecurity threats in the financial sector, Kari Tukur, vice president, Customer Solutions Centre, East and West Africa at Mastercard, said despite the massive awareness and innovations aimed at combating cybersecurity, the amount lost last year by DBMs was “staggering”.
She said, “With Nigeria’s rapidly growing economic expansion, we are starting to see an increase in the adoption of digital financial services, and the financial landscape is also evolving at an astronomical speed.
“What was staggering for me was in spite of the huge investment around innovation, funding in the cyber space, DBMs lost almost N10bn in Q2 last year, and that was almost 300 per cent growth year-on-year when compared to the previous year.”
She noted that there was the need for collaboration among stakeholders “to combat this rising sophistication of cyber security threat.”
Tukur further stated that Mastercard was deeply committed to cyber security and fraud prevention within the payment industry, disclosing that the company invested $250m “to assist small businesses in addressing their cyber security needs.”
She disclosed that Mastercard payment portals incorporated multiple layers of security such as tokenisation technology, encryption and biometrical to stay ahead of cyber attackers.
She added that, “The sector continues to struggle with the aforementioned challenges, necessitating vigilance, proactive action and comprehensive security strategy, and Mastercard remains committed to providing safe, secure and seamless payment services and experiences for our partners and customers in Nigeria and beyond.”
Celestina Appeal, chairman, Committee of e-Business Industry Heads (CeBIH), stated that the total loss to the banking industry in the last couple of years totalled hundreds of billions of naira while Nigeria’s Consumer Awareness and Financial Enlightenment Initiative had projected a $6trn loss by 2030 to cybercrime within and outside Nigeria.
Represented by Mr Temitope Onibaniyi, secretary of the committee, she stated that the committee was ever-willing to collaborate with industry stakeholders to fight against the perpetrators who “constantly rob banks and other stakeholders in the payments industry of their hard-earned money.”
She said the need for collaboration could not be overemphasised as no individual organisation was immune to cyber security attacks.
President Bola Tinubu has approved the appointment of some Nigerian professionals to the Board of the Securities and Exchange Commission (SEC).
This is contained in a statement issued by Ajuri Ngelale, special adviser to the President on Media and Publicity.
Tinubu appointed Mr. Mairiga Aliyu Katuka as the Chairman of the board of SEC, while Mr. Emomotimi Agama has been appointed as the Director-General of the board.
The president also appointed Frana Chukwuogor as Executive Commissioner (Legal and Enforcement) of the board.
Tinubu further appointed Mr. Bola Ajomale as the Executive Commissioner (Operations) of the board, while Mrs. Samiya Hassan Usman is the Executive Commissioner (Corporate Services) of the board.
Also appointed into the board are Mr. Lekan Belo as Non-Executive Commissioner and Mr. Kasimu Garba Kurfi as Non-Executive Commissioner.
According to Ngelale, the president anticipated that “all members of the Board of this critical commission will bring to bear their wealth of experience and competence in advancing the commission’s core mandate of developing and regulating a capital market that is dynamic, fair, transparent, and efficient, to bolster investor confidence and contribute immeasurably to the nation’s economic development.”
Ecobank has announced the successful repayment of its $500 million five-year Eurobond issued in 2019. According to a statement filed on the Nigerian Exchange Limited (NGX), the Eurobond garnered considerable interest from a diverse range of global investors, including long-term development partners such as FMO and Proparco, who served as anchor investors.
Commenting on this achievement, Ecobank Group Financial Officer, Ayo Adepoju, said: “The bond was listed on the main market of the London Stock Exchange with a coupon rate of 9.5 per cent. The principal and interest repayment, totalling $524 million, was distributed to bondholders through the transaction agent on the bond maturity date of April 18, 2024.
“This inaugural bond we are retiring today was critical in introducing our firm to a wider array of global investors and contributed to the increased visibility of our brand in the capital markets.”
Against the backdrop of challenges posed by the global operating environment, including disruptions in the world supply chain and financial markets, Adepoju highlighted the Group’s resilience. He cited strong liquidity, a robust balance sheet, and a solid leadership team as key factors enabling Ecobank’s success.
He added that the successful repayment of the Eurobond underscores Ecobank’s commitment to financial stability and investor confidence, positioning the firm for continued growth and success in the global market.
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