United Bank for Africa (UBA) delivered ₦766.6 billion ($493 million) in profit after tax for 2024 yet the Nigerian financial institution faced ₦1.14 billion ($744,200) in fraud costs from fraudulent transactions. Nigerian banks currently fight a continuous battle against rising fraud because most of the financial losses emerged from unauthorized transactions and electronic fraud schemes.
UBA provided transparency about its financial losses from criminal activities which amounted to ₦4.9 billion ($3.15 million) throughout 2024 resulting in 23% actual financial damage. The bank experienced its biggest financial loss due to electronic fraud amounting to ₦805 million ($518,000) which exceeded the ₦314 million ($202,000) spent through unauthorized transfers. Electronic fraud covered 88% of reported losses in fraudulent transfers.
The limited amount of fraud losses at UBA showcase how profitable financial institutions can still fall prey to fraudulent activities. During 2023 UBA achieved record-breaking profit after tax performance totaling ₦766.6 billion ($493 million which represented a 26% increase from ₦607.7 billion ($391 million tax profit in 2023.
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UBA has shared its first report on fraud since 2012 at a moment when Nigerian banks face rising pressure to fight fraud. According to the Financial Institutions Training Centre report the losses from bank scams during Q3 2024 reached ₦10.1 billion ($6.7 million) which showed a 76.4% decrease from the previous quarter. Sophisticated tactics of fraud criminals continue to present security challenges even to the most secure banking systems. According to FITC statistics outsider involvement in fraud cases escalated by 70.4% throughout Q2 and Q3 2024 alongside a staff-related fraud increase of 54% within this same timeframe.
The financial statements from UBA state “There is no fraud involving management or other employees who could have any significant role in the bank’s internal control.”
The rise in fraud incidents comes amid broader financial pressures in Nigeria’s banking sector. In January, the Central Bank of Nigeria directed NIBSS to debit the settlement accounts of commercial banks that receive fraud proceeds, a move aimed at forcing banks to tighten internal controls and curb illicit financial flows.
UBA’s disclosure marks a shift toward transparency in Nigeria’s banking sector, where many institutions still choose to downplay fraud risks for fear of suffering reputational harm. Only 60 of 163 financial institutions in Nigeria reported fraud cases in 2023, according to a Nigeria Inter-Bank Settlement System (NIBSS) report. As financial crime grows more sophisticated, regulators and banks have their work cut out: strengthen controls while maintaining customer trust.
