Depositors express concern as Wema Bank reports N1.13bn fraud

Depositors express concern as Wema Bank reports N1.13bn fraud

Depositors and stakeholders of the Moruf Oseni-led Wema Bank Plc are worried about the safety of their funds and the health of the lender over the hig

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Depositors and stakeholders of the Moruf Oseni-led Wema Bank Plc are worried about the safety of their funds and the health of the lender over the high level of fraud cases the bank recorded in the year 2023.

In its full-year 2023 financial statement released recently, Wema Bank disclosed that it recorded fraud in its system to the tune of N1.136 billion.

This has become worrisome to financial analysts and further showed that the bank’s security system may be either weak, poor, not up to industry standard or operated by unqualified personnel.

Assuredly, this development does not only affect depositors and create panic in the minds of customers of the bank, it also has ripple effects on the dividend payout to its shareholders.

The Central Bank of Nigeria, CBN and Nigerian Deposit Insurance Corporation (NDIC) Act 2006, mandates banks to render monthly returns of frauds and forgeries.

Sections 35 and 36 of NDIC Act 2006, also mandate banks to notify the corporation of any staff dismissed or whose appointment was terminated on accounts of fraud or financial irregularities.

In the audited 2023 financial statement, the bank recorded 1,195 fraud cases to the tune of a whopping N1.136 billion, out of which N685.595 million was lost.

The bank claimed 97 per cent of the fraud cases were executed by outsiders, adding that the cases valued at N860.395 million occurred through operations and others and N595.017 million was lost in the process.

Internet fraud was worth N203.724 million and N90.017 million was ferried away by fraudsters.

Fraudsters also attempted to steal N36.071 million via point-of-sale channels and N8.148 million through mobile banking but only succeeded in carting away N506, 000.

Scammers also attempted to steal N869,000 via automated teller machines and N27.39 million web frauds, but they were foiled.

“There is no fraud, whether or not material, that involves management or other employees who have a significant role in the bank’s internal control system,” the management of the bank stated.

Similarly, in the 2023 financial year, Wema Bank also incurred sanctions, paying penalties totaling N61.350 million, for contravention of cyber security framework law, section of bank and other financial institutions Act BOFIA, 2020, late rendition of returns; circulars on the CBN know your Customers among others.

On the cyber security framework, the apex bank asked the Wema Bank to pay N2 million while a total of N17.450 million and N20.00 million paid for contravention of the CBN circular on KYC and section 19 (3A) of the BOFIA 2020 respectively.

Wema Bank was made to pay a sum of N10 million, N8 million and N2 million for late rendition of the returns, breaches of Risk-Based Supervision (RBS) and regulatory breaches on CBN clearance respectively.

The bank also paid N1.9 million for late filing of 2022 audited financial statements with the Nigerian Exchange.

No doubt, the bank’s high fraud cases in 2023 leave much to be desired and exposes how vulnerable its system is.