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| MD/CEO, NDIC, Alh. Umaru Ibrahim |
The rate of fraud in the banking sector rose by 182.77 per cent from 3,786 cases in 2013 to 10,612 cases as of December 2014, the Nigerian Deposit Insurance Corporation has said.
The corporation in its 2014 annual report for the banking sector said the amount involved within the period under review increased by N3.81billion or 17.5 per cent from N21.8billion to N25.61bILLIOn.
The report said that as a result of the increase in the level of the fraud in the industry, the expected/actual loss rose from N5.76billion in 2013 to N6.19billion in 2014.
It attributed the fraud rate increase to the astronomical rise in online banking transactions including fraudulent transfers and withdrawals.
The report said, “The Deposit Money Banks reported 10,612 fraud cases in 2014 compared with 3,786 cases reported in 2013, representing an increase of 182.77 per cent.
“In the same vein, the amount involved increased by N3.81billion or 17.5 per cent from N21.80billion in 2013 to N25.61billion in 2014.
“Also the expected/actual loss increased from N5.76billion in 2013 to N6.19billion in 2014. The increase of 7.57 per cent in expected/actual loss in fraud and forgeries was mainly due to the astronomical increase in the incidence of web-based (online banking), Automated Teller Machine and fraudulent transfer/withdrawal of deposit frauds.”
In terms of asset quality, the report said the banking industry recorded significant improvement in the level of its asset quality during the period under review.
For instance, it said the banking industry’s total loans and advances rose by 25.73 per cent from N10.04trillion to N12.63trillion in 2014.
In the same vein, it said the industry’s amount of non-performing loans increased by 10.26 per cent from N321.66billion in 2013 to 354.84billion in 2014.
It said, “The banking industry non-performing loans to total loans ratio improved from 3.20 per cent in 2013 to 2.81 per cent in 2014 and was within the regulatory threshold of five per cent.
“The observed improved asset quality could be explained by the improved process of loan underwriting as well as the continued purchase of non-performing loans by Asset Management Corporation of Nigeria.
“The banking industry liquidity risk was moderate during the period under review. The industry average liquidity ratio rose from 50.63 per cent in 2013 to 53.65 per cent in 2014 showing an increase of 3.02 per cent over the 50.63 per cent in 2013.
“Individually, all the DMBs in the industry had liquidity ratios in excess of the minimum prudential requirement of 30 per cent as at December 31 2014, indicating that all DMBs were sufficiently liquid.”
In terms of deposit coverage, the NDIC report stated that there was a growth of 3.01 per cent in deposit insurance coverage in the total number of depositors of DMBs between the end of 2013 and 2014.
It said the number of depositors fully covered in the 23 DMBs increased by 3.05 per cent from 60,601,039 in 2011 to 62,447,952 in 2014, while the Deposit Insurance Fund grew by 20.88 per cent from N508.06billion in 2013 to N614.16billion in 2014.
The report also stated that during the year under review, the corporation continued with the payment of insured deposits to depositors of the closed 48 DMBs.
It said, “The NDIC paid a total of 6.832bn to 529,046 insured depositors as at December 31, 2014 as against 6.824bn to 528,277 insured depositors as at December 31, 2013.
“The NDIC continued with the payment of insured deposits of closed MFBs in 2014 through the agent banks.
“A cumulative payment of N2.772billion had been made to 80,178 verified depositors of closed MFBs in 2014 as against N2.524billion paid to 75,571 verified depositors in 2013.
“The payment of liquidation dividends to the uninsured depositors of closed DMBs continued in 2014.
“The sum of N94.74billion was paid as liquidation dividend to 250,592 depositors in 2014 compared to N93.51bn paid to 250,497 depositors as at December 31, 2013.”
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