Guaranty Trust Holding Company (GTCO), has revealed that the company as a whole witnessed increased fraud attempts in 2021. According to the company’s full-year financial report for 2022, the number of registered fraud incidences grew by 84.27% to 27,725. Furthermore, the amounts involved in these fraud cases increased from 1.2 billion to 6.4 billion.
The announcement by GTCO follows a trend of growing fraud instances by Nigerian deposit money banks. According to data from the Nigerian Deposit Insurance Scheme (NDIC), fraudulent activity detected by deposit banks in Nigeria increased by 44.8% between 2020 and 2021. According to statistics from Smile Identity, a KYC service, fraud attempts climbed by 50% between the second half of 2020 and the first half of 2022. Only the first half of 2022 saw a 30% growth over the same period in 2021.
The Nigerian Data Protection Bureau (NDPB) said earlier this year that it was investigating Guaranty Trust Bank and Zenith Bank for potential data breaches. The investigations were initiated by claims of unlawful disclosure of banking records to a third party and unlawful access and processing of personal data, according to the NDPB’s head of legal enforcement and regulations, Babatunde Bamigboye. Zenith Bank provided no details on its fraud experience in 2022. However, by 2022, the bank had become the target of online jokes and customer complaints alleging fraudulent transfers or payments from customer accounts.
Aside from Zenith Bank, several of Nigeria’s largest lenders have yet to publish their annual reports for 2022, nearly a month after the capital market regulator, Nigeria’s Securities and Exchange Commission (SEC), set the deadline.
“There are reports by the Nigeria Inter-Bank Settlement System (NIBSS) that indicated that within nine months of 2020, fraudsters attempted 46,126 attacks and they were successful with 41,979 occasions representing 91 percent of the time,” Bamigboye said of the prevalence of fraud incidents in Nigerian banks.
GTCO’s profit continued to fall in 2022, with profit-before-tax falling 3.32% from 221.49 billion to 214.15 billion. This is the lender’s second drop in profits following a spike in 2021. It is also a more than 10% decrease from the 238.09 billion reported in 2020. Furthermore, earnings per share fell from 6.14 to 5.95 per share. However, the company’s gross earnings rose for the first time in recent years, rising from $447.81 billion to $539.23 billion.
On the heels of increased customer deposits, GTCO’s total assets increased by 18.6% from 5.4 trillion to 6.4 trillion. According to the holding firm, customer deposits increased from 4.01 trillion to 4.48 trillion. The capital adequacy ratio (CAR) increased little, rising from 23.83% to 24.08%.
Rising deposits also fueled commercial loans, but loans to major firms dominated the bank’s loan book, as has been the pattern in Nigeria’s banking sector. Rising deposits also fueled commercial loans, but loans to major firms dominated the bank’s loan book was dominated by loans to major firms, as has been the pattern in Nigeria’s banking sector.
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