ATM/card-related frauds rise 11.95%

By Kokumo Goodie, Lagos, Nigeria

Fraud cases perpetrated through the use of automated teller machine (ATM) and other card payment system has risen 11.95% over last year’s cases, according to the Nigeria Deposit Insurance Corporation (NDIC) annual report.

According to the agency, there was an increase in the frequency of ATM/card-related frauds this year as cases rose from 7,181 in 2014 to 8,039 in 2015, reflecting an increase of 11.95 %, adding however that the loss suffered by the industry due to such frauds declined by 59.4 % from previous year figure of N1.242 billion to N0.504 billion, representing 15.9 % of total industry loss to frauds and forgeries.

NDIC lamented that generally fraud cases in the banking sector increased by 15.71% in 2015 as a total of 12,279 fraud cases were reported, representing an increase of15.71 % over the 10,612 fraud cases reported in 2014.  The cash involved in the fraud cases decreased by N7.59 billion or 29.63 per cent from N25.608 billion in 2014 to N18.021 billion in 2015 which it noted is significant.

Out of the 12,279 fraud cases reported by Deposit Money Banks (DMBs), 425 cases were attributed to insider abuse. The number of fraud cases perpetrated by workers 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 last year. The highest percentage of frauds and forgeries cases of 38.59 per cent was perpetrated by outsourced workers of the banks.

The actual loss suffered by the insured banks decreased by N3.02 billion or 48.79 % from N6.19 billion in 2014 to N3.17 billion in 2015, the report noted, adding that the actual loss sustained in respect of internet banking fraud was N857 million, representing 27 % of the total actual loss of the banking  industry.

On the financial condition of DMBs, the NDIC report noted that the banking industry total assets grew marginally by 1.36 %, with total loans and advances rising by 5.56 %, shareholders’ funds unimpaired by losses increased by 14.02%while capital adequacy ratio stood at 17.66 per cent.

However, total deposit liabilities declined by 2.83%, while unaudited profits decreased by 2.02per cent and non-performing loans increased by 82.87% in 2015.

The report added that the banking industry capital base remained strong giving that the capital adequacy ratio (CAR) of the banking industry was 17.66% in 2015 compared with 15.92per cent in 2014, adding that this exceeded the minimum threshold of 10per cent and 15per cent for national and international banks respectively.

The report said total loans and advances to the Nigerian economy stood at N13.33 trillion last year-, showing an increase of 5.56per cent over the N12.63 trillion reported in 2014, while non-performing loans to total loans ratio for the industry increased from 2.81per cent in 2014 to 4.87per cent last year, but was within the regulatory threshold of five per cent.

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

The banking industry’s liquidity position was strong as its average liquidity ratio rose slightly from 53.65per cent in 2014 to 58.18per cent in 2015. All the individual DMBs had liquidity ratios above the prudential minimum threshold of 30per cent as at 31st December, 2015. Overall, the banking industry remained stable during the year under review.



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