BREAKING: NFIU Alerts Banks, Others As ‘Scammers’ Devise New Method To Claim Funds From Abroad

The Nigerian Financial Intelligence Unit (NFIU) has issued a warning regarding scams involving tracing and recovering digital wire transfers from international banks into local accounts. In a June 2024 report, the NFIU mentioned its dedication to offering prompt advice or guidance to its partners using a method grounded in real-life examples. The agency’s report offers detailed insights into the latest trends, recurring patterns, questionable behaviours, and techniques aimed at taking advantage of the financial system for illegal and fraudulent purposes. The NFIU indicated that its research points to a growing problem of fraudulent petitions that target the tracing and recovery of funds supposedly sent from foreign banks to local ones. This issue, it said, poses a significant risk to the intended victims, Financial Institutions, Law Enforcement Agencies (LEAs), and other governmental bodies. “This advisory became necessary due to numerous petitions received by the NFIU from financial institutions, government agencies, and other third parties seeking assistance towards the tracing and recovery of funds transferred from foreign entities to their business partners in Nigeria. “The advisory aims to draw the attention of relevant stakeholders and the general public to the red flags as well as the emerging trends that have been observed, most especially the use of forged documents by fraudsters to defraud unsuspecting members of the public,” the NFIU report stated. The agency reported receiving numerous false petitions, including one where a law firm represented a non-governmental organization (NGO) and requested the NFIU and other related authorities to locate and reclaim €30 billion (Thirty Billion Euros) that had been moved from an international bank to a Nigerian bank, alleging that the funds were frozen by a Nigerian financial institution. According to NFIU, the NGO intended to use the funds for investments in the property sector. The NFIU also mentioned that a law firm had submitted a petition on behalf of its client to trace and recover €6 billion (Six Billion Euros) that had been transferred from international banks to the client’s Nigerian bank account. In response, the NFIU urged financial institutions and the public to remain cautious and to follow guidelines that would help protect crucial documents from being easily accessed to prevent their misuse in similar petitions. It said, “The public should exercise some level of scepticism when dealing with telegraphic transfer documents from major European banks as nearly all frivolous claims emanate from same jurisdictions and banks abroad.” In its recommendations to banks, NFIU said, “Upon receipt of a letter from a customer anticipating huge inflow, evidenced by the usual Telex copy, the financial institution should immediately conduct Enhanced Due Diligence, sufficient to establish authenticity or otherwise of the document presented. “Where issues of forgery are suspected, the financial institution must take steps to quickly respond in writing to the letter from the customer, clearly stating the non-existence of such pending transaction of funds. “This action must be taken immediately upon receipt of the complaint by the bank to avoid their use of the acknowledgement of the letters for fraudulent purposes. “Financial Institutions are advised to immediately file Suspicious Activity Report (SAR) on any entity or individual who presents such frivolous claims to the NFIU.” It advised the public to be “Aware of the threat posed by fraudulent individuals and their fictitious telegraphic inflows whilst noting the listed red flags as well as the mode of operations contained in this document. “The public must also take necessary steps geared towards scrutinizing potential business opportunities before committing financial resources. “The public should recognize the imminent risk of making investment on the strength of unverifia

CBN Reduces Banks’ Loan-To-Deposit Ratio To 50%

The Central Bank of Nigeria (CBN) has reduced the Loan-to-deposit ratio (LDR) of banks to 50 per cent from 65 per cent. The apex bank made this known in a circular to Deposit Money Banks titled “Re: Regulatory Measures to Improve Lending to the Real Sector of the Nigerian Economy”. The circular was signed by the Acting Director of the Banking Supervision Department, CBN, Adetona Adedeji. In a bid to increase lending to the economy especially Small and Medium Enterprises, SMEs, retail mortgage and consumer loans, the CBN on July 3, 2019, increased Banks’ LDR to 60 per cent from 57 per cent. The LDR was further raised to 65 per cent in January 20020. The reduction in the LDR according to analysts at Afrinvest Securities is to allow banks to comply with the Cash Reserve Ratio, CRR of 45 per cent. They said, “Today, the CBN in a circular to Deposit Money Banks titled “Re: Regulatory Measures to Improve Lending to the Real Sector of the Nigerian Economy” announced a scale down of the Loans to Deposits Rate (LDR) by 15.0ppts to 50.0% – reversing previous threshold set by the past CBN administration in January 2020. “In our view, this downward review of LDR allows banks to comply with the 45.0% CRR directive, and eases off pressure on the lenders considering the restrictive nature of other CBN directives including the Net Open Position (NOP) ceiling of 20.0% short and 0.0% long. Thus, we believe this policy would enhance the ability of banks to sweat out assets without creating unnecessary risks.”

Banks’ Loans Hit N8.03trn In H1 2023 – Report 

Oil and Gas, and manufacturing sectors lead other sectors in the amount of loans received from banks in the first half of 2023, accounting for 55.5 per cent of total N8.03 trillion to the economy as loans. This was revealed via data from the Sectoral Distribution of Credit by Deposit Money Banks published by the Central Bank of Nigeria (CBN) in the Statistical Bulletin for the second quarter of the year of 2023. The Oil and Gas sector got the largest share of N3.09 trillion representing 38.8 percent of fresh loans in the first half of 23, followed by the manufacturing sector which received N1.42 trillion or 17.5 per cent. The financial sector comprising the Finance, Insurance and Capital Market received the 3rd largest share of banks’ loans receiving N837 billion or 10.4 per cent of the new loans in the first half of 23. Trade and General Commerce received N670 billion representing 8.3 per cent while the Information, Communication and Technology sector received N517 billion representing 6.4 per cent of new loans in the first half 2023. General Services and Constructions received N398 billion and 348 billion respectively representing 5.0 per cent and 4.3 per cent of new loans in the first half of 23. The Power and Energy sector received N287 billion representing 3.6 per cent while the public sector (government) received N125 billion representing 1.6 per cent of new loans in the first half of 23. However, banks’ lending to the Mining & Quarrying sector declined by 16.6 per cent or N502 million in the first half of 2023, as lending to the sector dropped to N29.59 billion as the end of June from N30.09 billion at the beginning of the year. Similarly, lending to the Education sector dropped by 11 per cent to N84.19 billion at the end June from N94.4 billion at the beginning of the year.

TAJBank Records Highest Tier-1 Capital, Pre-Tax Profit

TAJBank Limited, a Nigeria’s non-interest bank has recorded the highest Tier-1 capital in the non-interest banking sub-sector in the first half of 2023. This is according to a statement by TAJBank’s Chief Executive Officer (CEO), Mr Hamid Joda. Joda said that the audited financial statements of the bank also reflected an increase in its Profit Before Tax (PBT) to N6.019 billion, which is the highest in the banking sub-sector and surpassed analysts’ projections. TAJBank also made history early this year when it listed the first tranche of N100 billion Sukuk Bond on the Nigerian Exchange Limited (NGX) after the successful issuance. Joda said that a further analysis of the latest audited financial statements showed that its total assets rose from N212.021 billion in December 2022 to N335.017 billion at the end of June 2023. He said that the figures indicated a 58 per cent increase. “Its gross earnings increased by 67 per cent from N136.149 billion at the end of December 2022 to N227.031 billion as of the end of June. “Other highlights of the bank’s financial scorecard in first half of 2023 reflected that the financing also significantly increased by 62 per cent from N78.235 billion recorded as of December 2022 to N126.725 billion by June. “The deposits base surged to N251.250 billion from N161.958 billion as of December 2022; while its total equity grew by 88 per cent from N19.135 billion in December 2022 to N36.706 billion as of June,’” he said. Joda, attributed TAJBank’s enviable feat to the increasingly proactive strategies being adopted by the management to respond to emerging trends in non-interest banking and deployment of the right resources. “What I can say about TAJBank’s latest scorecard is that we have demonstrated that hard work pays. “As we have maintained over the past three years, our interest is in our customers and we are pursuing this goal with all resources available to us to tell the whole world that TAJBank is the way to go in non-interest banking. “To demonstrate our commitment to this customer-friendly corporate slogan, we are investing in world-class technologies and digital payment solutions in our services nationwide,” he said. “In pursuit of non-interest financial inclusion drive, we have also opened five branches this year and plan to open more in other states in the next few months”, he said. TAJBank’s bank’s Executive Director, Mr Sherif Idi, said that the successes were made possible by the bank’s shareholders and customers. “Our thanks go to our growing customers and shareholders whose belief in our vision and capacity to drive TAJBank to the leading edge of market competition has taken us this far. “Let me assure them that TAJBank’s management and staff will continue to do its best to serve them better and protect their interests, which we value so much in all areas of operations,” he said.

Fraudsters fleece Nigerian banks of N9.5bn in 7 months -Report

The Nigeria Electronic Fraud Forum reported at the weekend said that Nigeria’s banking industry lost about N9.5 billion to electronic frauds between January and August 2023. According to the forum, the digital infrastructure in the financial system is still subject to manipulation by cybercriminals. Worried by the negative implications of the surging rate of e-fraud for the economy, the Forum has called for new measures and increased collaboration of all stakeholders, particularly the banks and the Ministry of Communications, Innovation and Digital Economy, to combat the rising trend. The Forum made this disclosure at its 3rd Quarter 2023 meeting in Lagos with the theme “New Strategies for Combating e-Fraud in a Cashless Environment”. Delivering his paper at the meeting, the Managing Director of Nigeria Inter-Bank Settlement System (NIBSS), Premier Oiwoh, reflected on the disturbing trend of e-frauds in the country, especially through betting platforms. The NIBSS boss, who was represented by the Chief Risk Officer at the meeting, Temidayo Adekanye, said: “Recently, we had the cashless policies from CBN, which was incurring a dramatic increase in the volume of transactions in the industry which variably as the impact of the volume of fraud in the industry itself. Now, the increased efficiency has also meant that fraud has dramatically increased across industry. “For Q1 2023, the total fraud reported through the industry forum portal was at N5.1 billion. For fraud trends over the last five years, in 2019, we’re looking at about N3 billion and currently 2023, we are looking at about N9.5 billion to date. Fraud losses have increased dramatically over the last five years. “So, as you can see also from the current perspective, from January to July 2023, there has been a slight jump between June and July, a 39 per cent increase with 8,649 with the actual fraud losses in July 2023, we’re looking at N1.2 billion which is a 54 per cent increase over the period. Now as you can see from January in general, we recorded about N2.7 billion in actual fraud losses.” “What we see most is the fact that the primary channels are the betting platforms. So once the money hits the betting platform or a wallet account or in some cases POS agents once it’s cashed out, it is a black hole. There is no way you can recover that money. We’re talking about potentially five per cent recovery rates across the industry. So, we all have to identify those betting and wallets accounts, POS agents, cryptocurrency accounts, and in some cases purchases,” Oiwoh added. In his remarks at the meeting, the NeFF Chairman and CBN’s Director, Payment Systems, Musa Jimoh, said: “Today, we are here to continue that conversation to look at new strategies by which we can combat E-fraud. If we don’t combat the cyber criminals, they will weigh us down and disrupt the entire system. So, we all need to work together to see how we can make life extremely difficult for cybercriminals. “We need to look at new ways, new techniques, and more efficient manners by which we can improve and guard against the banking and payment infrastructure and educate ourselves on how we can safeguard our bank credentials or tokens and all the information that the banks have provided to us to safeguard.

NDIC assures depositors of 182 closed MfBs, PMBs speedy payment 

The Nigeria Deposit Insurance Corporation (NDIC) has assured depositors affected by the recent revocation of the licenses of 178 Microfinance Banks (MFBs) and four Primary Mortgage Banks (PMBs) by the Central Bank of Nigeria (CBN) of speedy payment of their insured deposits. The Managing Director of NDIC Mr. Bello Hassan gave the assurance during a three-day capacity-building workshop for management staff of the corporation at the weekend in Ikot Ekpene, Akwa Ibom state. The event had as its theme: ‘Result Based Procurement: A Strategic Approach’ was organized by the Corporation in collaboration with the Bureau of Public Procurement (BPP). The Managing Director represented by the Executive Director, Operation, Mr Mustapha Ibrahim stressed that the Corporation would not compromise standards as it would also ensure that depositors get their money promptly to prevent a panic situation. Hassan stated that NDIC would continue to strengthen the financial system to appropriately support the economic advancement of the nation and also contribute meaningfully to financial system stability. “It is also pertinent to remind ourselves of the role the Nigeria Deposit Insurance Corporation (NDIC) continues to play as a key player in the Financial Safety-Net arrangement of the country’s banking system as a Deposit Insurer; others being; the prudential regulation & supervision, failure resolution, deposit insurance and lender of last resort function of the Central Bank of Nigeria (CBN). These components continue to safeguard the safety and soundness of the banking system as well as promote financial stability.  “Following the recent revocation of the licenses of 178 Microfinance Banks (MFBs) and four Primary Mortgage Banks (PMBs) by the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC) has since commenced the liquidation exercise with the main purpose of paying the guaranteed sum, recovery of debts owed the banks, sale of physical assets and payment of liquidation dividend on the uninsured sum.  “The NDIC is hereby assuring depositors of the closed banks of speedy payment of their insured sums,” he added  Hassan expressed delight at the collaboration and training of procurement staff by BPP saying it has helped to conserve funds, block leakages, and enhance healthy competition and transparency. In his remark, the Director-General of BPP, Mr. Mamman Ahmadu cautioned that any public procurement without plans and records is tantamount to criminality. Ahmadu, represented by the Director, Research and Development/ICT, Mr. Aliyu Aliyu assured that the agency will continue to collaborate with NDIC to ensure smooth sailing on its procurement activities.