United Bank for Africa (UBA) recorded a fraud-related loss of ₦1.14 billion ($744,200) in 2024, even as it reported a post-tax profit of ₦766.6 billion ($493 million), according to its latest audited financial statements.
These losses, primarily attributed to electronic fraud and unauthorized transfers, reflect the ongoing challenges Nigerian banks face in combating financial crime.
UBA disclosed that fraudulent transactions in 2024 amounted to ₦4.9 billion ($3.15 million), with 23% resulting in actual financial losses. Electronic fraud was the most significant contributor, costing the bank ₦805 million ($518,000), while unauthorized transfers accounted for ₦314 million ($202,000), representing 88% of the total fraudulent transfer value.
While these fraud-related losses constitute only a small fraction of UBA’s record-breaking annual profit, they highlight the persistent vulnerabilities financial institutions face.
The bank’s post-tax profit of ₦766.6 billion ($493 million) represents a 26% rise from ₦607.7 billion ($391 million) recorded in 2023. UBA’s disclosure (the first since 2012) comes at a time when Nigerian banks are under increased pressure to reduce fraud risks.
According to a report by the Financial Institutions Training Centre (FITC), Nigerian banks lost ₦10.1 billion ($6.7 million) to fraud in the third quarter of 2024, marking a 76.4% decline from the previous quarter. However, the increasing sophistication of fraudsters continues to pose a significant challenge. The FITC report revealed a 70.4% surge in outsider involvement in fraud cases between the second quarter and the third quarter of 2024, alongside a 54% increase in staff-related fraud.
UBA emphasized in its financial statements that no cases of fraud involved the management or employees with critical roles in internal control.
The rise in fraud cases occurs amid broader financial pressures within Nigeria’s banking sector. In January, the Central Bank of Nigeria instructed the Nigeria Inter-Bank Settlement System (NIBSS) to debit the settlement accounts of commercial banks that receive fraud proceeds. This directive aims to enhance internal controls and curb illegal financial transactions.
UBA’s decision to disclose its fraud-related losses signifies a shift toward greater transparency within Nigeria’s banking industry, where many institutions prefer to downplay fraud incidents to avoid reputational damage. According to an NIBSS report, only 60 out of 163 financial institutions in Nigeria reported fraud cases in 2023. As financial crime grows more sophisticated, banks and regulators must strengthen security measures while maintaining customer trust.
