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Banks reported 3380 fraud cases in 2012

21 August 2013, 09:50

Abuja - The Nigeria Deposit Insurance Corporation (NDIC) said on Tuesday that various Money Deposit Banks (MDBs) reported 3380 fraud cases in 2012.

This is contained in the NDIC's annual report released in Abuja.

“The DMBs reported 3380 fraud cases involving the sum of N17.97 billion with expected loss of about N4.52 billion in 2012.”

“The expected loss had increased by N455 million, representing 10.9 per cent as against N4.072 billion reported in 2011.”

“Notwithstanding the 43.7 per cent increase in the number of reported fraud cases from 2 352 in 2011 to 3380 in 2012, the amount involved decreased by 36.4 per cent from N28.40 billion in 2011 to N18.04 billion in 2012.”

It report noted that in terms of level of soundness, 10 banks were rated sound, nine satisfactory and only one was rated marginal.

According to the report, the industry can be considered to be relatively stable in 2012.

It noted that there was no unsound bank in the banking industry as at December 31, 2012.

On banks' performance, it said that the banking industry recorded significant improvement in its financial condition and performance in 2012 as revealed by all major financial indicators, compared to the previous year.

“For instance, the banking industry’s total assets grew from N21.89 trillion in 2011 to N24.58 trillion in 2012 or 10.91 per cent.”

“Out of the total industry’s assets of N24.58 trillion, total loans and advances stood at N8.15 trillion, representing over 33 per cent or one-third of total assets.”

“Of the banking industry total loans, the sum of N4.48 trillion or 54.97 per cent was extended to the real sector of the economy in 2012 as against N3.88 trillion 53.37 per cent  and N3.51 trillion  48.95 per cent in 2011 and 2010, respectively.”

It noted that that there was a rising trend in the banking industry’s credits to the agricultural sector, which stood at 3.60 per cent of total loans and advances in 2012, compared to 2.15 per cent and 3.11 recorded in 2010 and 2011, respectively.

The report noted that the banking industry was adequately capitalised in the year under review with capital adequacy ratio of 18.07 per cent compared to 17.71 per cent recorded in 2011.

“All the DMBs also met the minimum liquidity threshold of 30 per cent, the asset quality significantly improved during the year as the ratio of non-performing loans to total loans decreased from 4.95 per cent in 2011 to 3.51 per cent in 2012.”

It commended the effort of AMCON in buying over the bad loans of banks, saying: “The overall effect was an improvement in the industry’s profit before tax which increased from a loss of N6.71 billion in 2011 to a profit of N525.34 billion in 2012.”

On payment to depositors of banks-in-liquidation during the year under review, it said that the corporation had paid a cumulative sum of N6.82 billion to 528,212 insured depositors of closed banks by Dec. 31, 2012, as against N6.68 billion paid to 527 942 insured depositors as at Dec. 31, 2011.

It added that the feat was achieved, in spite of the long closure of the banks and the unwillingness of many depositors to file for their claims.

“Similarly, a total sum of N2.505 billion was paid to 75 322 verified depositors of 95 out of 103 closed Micro Finance Banks (MFBs) during the year as against the sum of N2.249 billion paid to 72 062 verified depositors in 2011.”

“Also, the sum of N73.58 billion had been paid as liquidation dividend to 250 209 depositors of DMBs as at Dec. 31, 2012,” it said.

 It added that that a total of 14 out of the 34 banks-in-liquidation prior to 2006 had declared a final dividend of 100 per cent of their total deposits, indicating that all depositors of the affected closed banks had fully recovered their deposits.

In the year under review, the licences of 24 DMBs, which had hitherto, closed shop and were unable to meet obligations to their depositors and creditors, were revoked by the CBN and NDIC was subsequently appointed as liquidator.

It noted that as at December 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.”

“The remaining 555 did not render returns and that situation continued to be a source of concern to NDIC as it was impossible to assess their financial condition and performance on a continuous basis during the year under review,” it said.

It said that the NDIC, in collaboration with the CBN, conducted Risk-Based Examination of 16 deposit money banks DMBs during the year.

The report noted that the corporation led the examination of six of the banks while the CBN led in 10.

It said that the two institutions conducted a maiden examination of the three banks acquired by AMCON; Keystone Bank, Mainstreet Bank and Enterprise Bank during the year.

“The corporation in collaboration with the CBN also conducted the maiden examination of Jaiz Bank Plc and the Stanbic-IBTC Non-Interest window during the year under review,”it said.


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