NDIC Decries The Rising Financial Sector Fraud In Nigeria

Nigeria Deposit Insurance Corporation (NDIC) has decried the 15.71 per cent surge in banking sector fraud and forgeries in 2015 with a total of 12,279 reported cases over the 10,612 reported in 2014.

The report says there is rise in Automated Teller Machine (ATM/card-related  fraud cases from 7,181 in 2014 to 8,039 in 2015, representing an increase of 11.95 per cent. Although the loss suffered by the industry due to such frauds declined significantly by 59.4 per cent from previous year figure of N1.242 billion to N0.504 billion, representing 15.9 per cent of total industry loss to frauds and forgeries, it was not pleased about the rising frequency.

Out of the 12,279 fraud cases reported by the Deposit Money Banks (DMBs), 425 cases were attributed to staff. The number of fraud cases perpetrated by staff, the report noted, had decreased from 465 in 2014 to 425 in 2015.

Similarly, losses arising therefrom substantially decreased by 70 per cent from N3.165 billion in 2014 to N0.979 billion in 2015. The highest percentage of frauds and forgeries of 38.59 per cent  was perpetrated by temporary staff.  In its 2015  annual report released yesterday,  the corporation said, however, that the amount involved decreased significantly by N7.59 billion or 29.63 per cent from N25.608 billion in 2014 to N18.021 billion in 2015 while the actual loss suffered by the insured banks decreased by N3.02 billion or 48.79 per cent from N6.19 billion in 2014 to N3.17 billion in 2015.

Despite the frauds, NDIC said the banking industry capital base remains strong as the capital adequacy ratio (CAR) of the banking industry rose 17.66 per cent  in 2015 compared with 15.92 per cent in 2014, exceeding the minimum threshold of 10 per cent  and 15 per cent for national and international banks respectively, although two DMBs had CAR below the prescribed threshold of 10 per cent in 2015.

Also, the report said that the total loans and advances to the Nigerian economy stood at N13.33 trillion in 2015, showing an increase of 5.56 per cent  over the N12.63 trillion reported in 2014 as non-performing loans  ratio for the industry increased from 2.81 per cent in 2014 to 4.87 per cent in 2015 but remained within the regulatory threshold of 5 per cent.

“The banking industry operated profitably, though earnings and profitability deteriorated. The unaudited profit-before-tax (PBT) of the banking industry stood at N588.86 billion as at December 31, 2015, representing a decrease of 2.02 per cent over N601.02 billion reported as at December 31, 2014,” NDIC said.