United Bank for Africa (UBA) lost ₦1.14 billion ($744,200) to fraud in 2024, even as it recorded a profit after tax of ₦766.6 billion ($493 million). The bank’s latest audited financial statements reveal that electronic fraud and unauthorized transfers were the main culprits behind these losses, highlighting the persistent fraud challenges in Nigeria’s banking sector.
UBA disclosed that fraudsters targeted transactions worth ₦4.9 billion ($3.15 million) in 2024. Of this amount, 23% resulted in actual losses. Electronic fraud accounted for ₦805 million ($518,000) in losses, while fraudulent transfers led to ₦314 million ($202,000)—representing 88% of the total value of such cases.
Fraud Losses vs. Record-Breaking Profits
Despite these losses, UBA’s ₦766.6 billion ($493 million) profit after tax marks a 26% increase from ₦607.7 billion ($391 million) in 2023. While fraud losses make up only a small fraction of the bank’s earnings, they highlight the growing risks posed by financial crime.
UBA’s disclosure is its first fraud-related report since 2012, coming at a time when Nigerian banks are under pressure to tighten security measures. Nigerian banks lost ₦10.1 billion ($6.7 million) to fraud in Q3 2024, a 76.4% decline from the previous quarter, according to a report by the Financial Institutions Training Centre (FITC). However, fraudsters are becoming more sophisticated, with outsider involvement in fraud cases rising by 70.4% between Q2 and Q3 2024. Staff-related fraud also increased by 54% during the same period.
Nigerian Banks Under Pressure to Combat Fraud
UBA stated in its financial report that no fraud cases involved management or employees with significant internal control roles. However, the overall rise in fraud cases across the banking sector has pushed regulators to take action.
In January 2024, the Central Bank of Nigeria (CBN) directed NIBSS to debit the settlement accounts of commercial banks that receive fraudulent funds. This measure aims to force banks to strengthen internal controls and curb illicit transactions.
UBA’s fraud disclosure signals a shift toward greater transparency in Nigeria’s banking industry. Historically, many banks have downplayed fraud risks to avoid reputational damage. In 2023, only 60 out of 163 financial institutions in Nigeria reported fraud cases, according to the Nigeria Inter-Bank Settlement System (NIBSS).
As fraudsters become more advanced, Nigerian banks and regulators face a tough challenge which is enhancing security measures while maintaining customer trust.
READ MORE:
PalmPay rolls out Verve debit cards as Nigerian fintechs shift to local providers
Why Bank Transfers Are Becoming Nigeria’s Preferred Payment Method