Introduction
Fraud remains a growing problem in Nigeria’s banking sector, and even top financial institutions are feeling the impact. United Bank for Africa (UBA) lost ₦1.14 billion ($744,200) to fraud in 2024, despite reporting a record-breaking profit of ₦766.6 billion ($493 million).
UBA’s latest audited financial statements reveal that fraudulent activities—including electronic fraud and unauthorized transfers—accounted for 23% of all flagged transactions.
Let’s dive deeper into the numbers, the growing risks of financial fraud, and what this means for the banking sector in Nigeria.
How UBA Lost Over ₦1 Billion to Fraud
UBA disclosed that a total of ₦4.9 billion ($3.15 million) in transactions was linked to fraudulent activities in 2024. However, not all of these led to actual losses. Here’s a breakdown of where the money went:
📌 Electronic fraud – ₦805 million ($518,000) in losses.
📌 Fraudulent transfers – ₦314 million ($202,000) in losses, affecting 88% of the transactions involved.
These losses represent a tiny fraction of UBA’s profits, but they highlight how fraudsters continue to target the banking industry.
Nigerian Banks & The Growing Fraud Crisis
UBA isn’t alone in this battle. Nigerian banks collectively lost ₦10.1 billion ($6.7 million) to fraud in Q3 2024, although this was a 76.4% decline from the previous quarter.
🔺 Outsider fraud (fraud carried out by people outside the bank) increased by 70.4% between Q2 and Q3 2024.
🔺 Staff-related fraud (internal fraud by bank employees) rose by 54% in the same period.
This suggests that fraudsters are becoming more sophisticated, adapting their methods to exploit banking vulnerabilities.
UBA’s Response: Is the Bank Doing Enough?
UBA insists that there has been no fraud involving management or key employees who could manipulate internal controls.
However, the banking sector as a whole is under pressure to do more.
🔹 The Central Bank of Nigeria (CBN) has already taken action by directing the Nigeria Inter-Bank Settlement System (NIBSS) to debit commercial banks that receive fraud proceeds.
🔹 This means that if a fraudulent transaction is traced to a bank account, the receiving bank will be forced to pay back the stolen funds.
With this new directive, banks must strengthen their internal controls to avoid being penalized for fraudulent activities.
Why UBA’s Transparency Matters
One of the most notable aspects of UBA’s fraud disclosure is the shift toward transparency.
In the past, many Nigerian banks chose to hide their fraud losses to avoid damaging their reputation.
📌 In 2023, only 60 out of 163 financial institutions in Nigeria reported fraud cases.
📌 This means over 100 banks and financial institutions failed to disclose fraud, making it harder to tackle the problem industry-wide.
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By openly discussing its fraud challenges, UBA sets a precedent for greater transparency in Nigeria’s banking sector.
Final Thoughts: What’s Next for Nigerian Banks?
Fraud is an ongoing battle for Nigeria’s financial institutions.
💡 Banks like UBA must invest in stronger cybersecurity measures, fraud detection tools, and customer education to minimize risks.
💡 The CBN and NIBSS must continue to enforce stricter regulations to hold banks accountable.
💡 Customers should also stay alert, using secure banking methods and reporting suspicious activities.
The big question remains: Will Nigerian banks finally get ahead of fraud, or will fraudsters continue to outsmart the system?
Share your thoughts! Do you think banks are doing enough to protect customers?
