Nine financial institutions in Nigeria paid fines totaling N678 million in 2023 for regulatory violations, a significant decrease from the N6.31 billion paid in 2022, according to an analysis of their annual reports by The PUNCH.
The banks that faced these penalties include FBN Holdings, Access Holdings, Guaranty Trust Holding Company (GTCO), Zenith Bank Plc, United Bank for Africa Plc (UBA), Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group. The fines were imposed by regulatory bodies such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission, NGX Regulation Limited, FMDQ, and the National Pension Commission.
Breakdown of Penalties
Zenith Bank, which incurred no penalties in 2022, was fined N21 million in 2023. The fines included N5 million for late rendition of CBN returns, N10 million for employing staff without CBN approval, N2 million for not addressing auditor recommendations, and N4 million for compliance issues related to politically exposed persons.
FBN Holdings paid N17.26 million in fines in 2023, down from N26 million the previous year. The penalties were primarily for late submission of financial statements to NGX RegCo and the SEC. Additionally, its subsidiary, FBNQuest Merchant Bank, paid N3 million to the SEC and N0.11 million to FMDQ for various infractions.
Access Holdings significantly reduced its fines from N604 million in 2022 to N81.60 million in 2023. The penalties included fines from PenCom for unauthorized advertising and data recapture sanctions, NGX RegCo for late financial statement filings, and the CBN for several infractions, including employment issues and delayed customer response.
GTCO’s fines dropped from N4.21 billion in 2022 to N73.98 million in 2023. These included penalties for risk asset examinations, consumer protection exercises, and AML/CFT examinations. Its subsidiaries also faced fines for non-compliance with regulatory requirements.
UBA reduced its penalties from N1.14 billion in 2022 to N110 million in 2023. The bank emphasized its zero-tolerance policy for regulatory infractions, highlighting efforts to integrate compliance into its business practices.
Fidelity Bank paid N42.96 million in fines in 2023, down from N100.71 million in 2022. The penalties were mainly for AML/CFT infractions and late returns filings.
Wema Bank’s fines increased to N61.35 million in 2023 from N2 million the previous year, primarily for cybersecurity framework contraventions, KYC issues, and late returns.
Stanbic IBTC Holdings saw a 22.01% decrease in fines, from N159 million in 2022 to N124 million in 2023. Penalties were imposed by the SEC for unauthorized investment products and by PenCom for RSA registration violations.
Regulatory Impact
The reduction in fines indicates improved regulatory compliance among Nigerian banks. However, the substantial penalties still highlight ongoing challenges in adhering to regulatory standards. The CBN, SEC, and other regulatory bodies continue to enforce strict compliance to maintain financial stability and integrity within the banking sector.
These measures aim to enhance transparency, reduce financial misconduct, and ensure that banks operate within the legal frameworks set by the regulatory authorities. The ongoing efforts by the banks to improve their compliance frameworks are crucial for fostering a stable and trustworthy financial environment in Nigeria.
