United Bank for Africa (UBA) recorded ₦1.14 billion ($744,200) in fraud-related losses in 2024, despite posting a profit after tax of ₦766.6 billion ($493 million) for the year, according to its latest audited financial statements. The bank attributed the losses primarily to electronic fraud and unauthorized transfers, reflecting the persistent challenge of financial crimes within Nigeria’s banking sector.
UBA disclosed that ₦4.9 billion ($3.15 million) worth of transactions were linked to fraudulent activities in 2024, with 23% of these resulting in actual financial losses. Among the fraud-related incidents, electronic fraud accounted for ₦805 million ($518,000), while fraudulent transfers led to ₦314 million ($202,000), representing 88% of the total value lost in such cases.
Although these losses represent a small fraction of UBA’s overall profitability, they highlight the growing sophistication of financial fraud in Nigeria. The bank’s ₦766.6 billion profit for the year reflects a 26% increase from ₦607.7 billion ($391 million) in 2023, demonstrating strong financial performance despite the challenges posed by fraud.
Fraud in Nigerian Banks: A Growing Concern
UBA’s fraud disclosure, the first from the bank since 2012, comes amid heightened scrutiny of fraud risks in Nigeria’s banking sector. Nigerian banks lost ₦10.1 billion ($6.7 million) to fraud in Q3 2024, according to a Financial Institutions Training Centre (FITC) report. However, this figure represents a 76.4% decline from the previous quarter, suggesting increased efforts to combat financial crimes.
Despite the overall decline in fraud-related losses, external fraud cases surged by 70.4% between Q2 and Q3 2024, while staff-related fraud rose by 54%, according to the FITC. While UBA stated in its financial statements that “there is no fraud involving management or other employees who could have any significant role in the bank’s internal control,” the broader trend underscores the need for stronger fraud prevention measures.
Regulatory Efforts and Industry Response
In response to the rising threat of fraud, the Central Bank of Nigeria (CBN) directed the Nigeria Inter-Bank Settlement System (NIBSS) in January 2025 to debit the settlement accounts of banks receiving fraud proceeds. The directive aims to tighten internal controls and curb illicit financial flows, reinforcing accountability across the banking industry.
UBA’s decision to publicly disclose its fraud-related losses signals a shift toward greater transparency in Nigeria’s financial sector. Historically, many Nigerian banks have been reluctant to report fraud cases, fearing reputational damage. A NIBSS report revealed that in 2023, only 60 out of 163 financial institutions reported fraud cases, raising concerns about underreporting and lack of transparency in the sector.
Balancing Security and Customer Trust
As financial fraud grows more sophisticated, Nigerian banks and regulators face the challenge of strengthening security controls while maintaining customer trust. With cybercriminals continually devising new tactics, banks must invest in advanced fraud detection technologies, staff training, and stricter internal monitoring to safeguard customer funds.
Despite these fraud-related losses, UBA’s strong financial performance demonstrates its resilience. However, the banking sector as a whole must remain vigilant as fraudsters continue to exploit vulnerabilities in digital banking systems.
Looking Ahead
With fraud risks evolving alongside advancements in digital banking, the Nigerian financial sector must continue to adapt, innovate, and enforce stricter controls. UBA’s transparency in fraud reporting may encourage other banks to follow suit, fostering a more accountable and secure financial ecosystem in Nigeria.
