Banks in the country reported a total of 12,279 fraud cases in 2015, the just released annual report of the Nigeria Deposit Insurance Corporation (NDIC) has revealed.
The development represents an increase of 15.71% over the 10,612 fraud cases reported in 2014. However, the amount involved decreased significantly by N7.59 billion or 29.63% from N25.608 billion in 2014 to N18.021 billion in 2015. Similarly, 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 actual loss sustained in respect of internet banking fraud wasN857 million, representing 27% of total actual loss of the industry. There was an increase in the frequency of ATM/Card-Related fraud cases from 7,181 in 2014 to 8,039 in 2015, an increase of 11.95%.
However, the loss suffered by the industry due to such frauds declined significantly by 59.4% from previous year figure of ₦1.242 billion to ₦0.504 billion, representing 15.9% of total industry loss to frauds and forgeries.
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 had decreased from 465 in 2014 to 425 in 2015.The highest percentage of frauds and forgeries cases of 38.59% was perpetrated by temporary staff.
The report further disclosed that banking industry total assets grew marginally by 1.36%, total loans and advances rose by 5.56%, shareholders’ funds unimpaired by losses increased by 14.02% while capital adequacy ratio stood at 17.66%.
The banking industry capital base remained strong. The capital adequacy ratio (CAR) of the banking industry was 17.66% in 2015 compared with 15.92% in 2014, but exceeded the minimum threshold of 10% and 15% for national and international banks respectively.
Total loans and advances to the Nigerian economy stood at ₦13.33 trillion in 2015, showing an increase of 5.56% over the ₦12.63 trillion reported in 2014. The non-performing loans to total loans ratio for the industry increased from 2.81% in 2014 to 4.87% in 2015.
The banking industry operated profitably, though earnings and profitability deteriorated. The unaudited profit-before-tax (PBT) of the banking industry stood at ₦588.86 billion as at 31 December, 2015 representing a decrease of 2.02% over ₦601.02 billion reported as at 31 December, 2014.
According to the report, the banking industry’s liquidity position was strong as its average liquidity ratio rose slightly from 53.65% in 2014 to 58.18% in 2015. All the individual DMBs had liquidity ratios above the prudential minimum threshold of 30% as at 31 December, 2015.
On the Micro-Finance Banks (MFBs), the annual report said their paid-up capital increased by 54.40% from ₦54.52 billion in 2014 to ₦84.18 billion in 2015. The MFBs had average CAR of 43.75% as at 31 December, 2015.
Their total loans and advances however increased by 46.34% from ₦114.70 billion in 2014 to ₦167.85 billion in 2015. The quality of risk assets deteriorated further as the NPL increased from 18.54% in 2014 to 23.13% in 2015, which exceeded the prudential maximum threshold of 5%.
Still on the MFBs, their unaudited Profit before tax decreased by 77.63% from ₦7.51 billion in 2014 to ₦1.68 billion in 2015. Also, return on assets (ROA) and return on equity (ROE) for the sub-sector declined from 3.39% and 14.70% in 2014 to 0.47% and 13.74% in 2015, respectively.
The liquidity position of the micro-finance sub-sector was strong as average liquidity ratio rose from 80.37% in 2014 to 119% in 2015 and compared favourably with the minimum prudential threshold of 20%.
On Primary Mortgage Banks (PMBs), the report painted a bad picture of their inability to file in their returns as and when due. Out of 42 PMBs in operation, a total of 14 failed to render returns to the NDIC and unpaid premium from nine (9) PMBs amounted toN238.30 million in 2015.
Total loans and advances extended by the sub-sector declined significantly by 31.87% to N168.96 billion in 2015. There was a significant improvement in the quality of assets as the non-performing loans (NPL) ratio decreased from 44.14% in 2014 to 15.40% in 2015. Despite that improvement, the NPL ratio of 15.40% exceeded the prudential maximum threshold of 5%.
However their unaudited Profit before tax rose from N2.79 billion in 2014 to N3.31 billion in 2015 due to significant rise in interest income and non-interest income by 90.75% and 321.05% in 2015, respectively.
The PMBs liquidity position was strong during the period under review as the average liquidity ratio was 72.63% in 2015 as against 80.37% in the previous year and exceeded the prudential minimum threshold of 20%.