Bankers commit N18bn fraud in 2012 – NDIC

NDIC*Claims only 10 banks sound in Nigeria

21 AUGUST 2013, ABUJA — DESPITE claims that the nation’s 24 banks are strong and posting huge profit, fraudulent practises have continued among operators with no fewer than 3, 380 cases involving N17. 97 billion recorded last year.

According to the Nigeria Deposit Insurance Corporation, NDIC, annual report for 2012, this has resulted in a loss of about N4. 52 billion.

The report, released in Abuja yesterday, also said only 10 banks were rated sound in the year under review.

“The DMBs reported 3,380 fraud cases involving the sum of N17.97 billion with expected/contingent loss of about N4.52 billion in 2012.

“The expected/contingent loss had increased by N455 million (10.9 percent) as against N4.072 billion reported in 2011,” NDIC said.

The corporation said, however, that the amount involved in the fraud cases decreased by 36.4 percent from N28.40 billion in 2011 to N18.04 billion in 2012.

It said DMBs posted a combined profit before tax of N525 billion, adding that last year’s performance was an indication that the banks were strong and well capitalised.

“The banking industry was adequately capitalised in the year under review with capital adequacy ratio of 18.07 percent compared to 17.71 percent recorded in 2011. All the DMBs also met the minimum liquidity threshold of 30 percent. The asset quality significantly improved during the year as the ratio of non-performing loans to total loans decreased from 4.95 percent in 2011 to 3.51 percent in 2012.

“The improvement in the banking industry’s asset quality was due to the purchase of the non-performing loans of DMBs by AMCON and the enhanced credit risk management by DMBs. 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,” it said.

The report said in terms of level of soundness, 10 banks were rated sound, nine satisfactory, while one bank was rated marginal, adding that “the industry could be considered to be relatively stable in 2012.

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

The corporation said it continued to pay depositors of banks-in-liquidation during the year with cumulative payment of N6.82 billion to 528,212 insured depositors of closed banks by December 31, 2012 as against N6.68 billion paid to 527,942 insured depositors as at December 31, 2011.

The NDIC said 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, it said a total sum of N2.505 billion was paid to 75,322 verified depositors of 95 of 103 closed MFBs during the year, 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 December 31, 2012. It is pertinent to indicate that a total of 14 out of the 34 banks-in-liquidation prior to 2006 had declared a final dividend of 100 percent of their total deposits, indicating that all depositors of the affected closed banks had fully recovered their deposits,” the corporation said.

The NDIC said 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.
*Emma Ujah, Vanguard

About the Author