Banks reported 3,380 fraud cases in 2012, says NDIC

The Nigeria Deposit Insurance Corporation said on Tuesday that various
Money Deposit Banks in the country reported some 3,380 fraud cases in
2012.
This was contained in the NDIC’s annual report released in Abuja.
The report said: “The DMBs reported 3,380 fraud cases involving the
sum of ₦17.97 billion with expected/contingent loss of about ₦4.52
billion in 2012.
“The expected/contingent loss had increased by ₦455 million,
representing 10.9 per cent as against ₦4.072 billion reported in 2011.
“Notwithstanding the 43.7 per cent increase in the number of reported
fraud cases from 2,352 in 2011 to 3,380 in 2012, the amount involved
decreased by 36.4 per cent from ₦28.40 billion in 2011 to ₦18.04
billion in 2012.”
The 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.
The report added: “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,” the report added.
It commended the effort of AMCON in buying over the bad loans of
banks, adding: “The overall effect was an improvement in the
industry’s profit before tax which increased from a loss of ₦6.71
billion in 2011 to a profit of ₦525.34 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
₦6.82 billion to 528,212 insured depositors of closed banks by
December 31, 2012, as against ₦6.68 billion paid to 527,942 insured
depositors as at December 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.
The report said: “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 ₦2.249 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 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 Central Bank of Nigeria and the
Nigeria Deposit Insurance Corporation 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 ₦20 million.
It said: “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 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.