Wema bank tightens security after losing N658m to fraud

Alex Omenye
Alex Omenye

Wema Bank boasting of ₦1.8 trillion ($1.6 billion) in consumer deposits has disclosed ₦685 million ($594,943) in fraud and forgery losses for the year 2023, shedding light on the pervasive issue of fraud within Nigeria’s financial sector.

According to a spokesperson for Wema Bank interviewed by TechCabal, these losses encompassed incidents across their digital platforms and payment channels, including those involving third-party entities linked to their system.

The spokesperson also attributed some of these losses to challenges related to Know Your Customer protocols and compliance standards.

To address these challenges, Wema Bank has initiated efforts to bolster its fraud monitoring mechanisms, including expanding its workforce within the digital compliance department.

Additionally, the bank reported a significant decline in the number of fraud cases during the first quarter of 2024, expressing confidence in mitigating similar losses in the upcoming financial year.

Despite grappling with fraud issues, Wema Bank demonstrated remarkable growth in 2023, as evidenced by a threefold increase in profits from ₦11 billion in 2022 to ₦35 billion. This substantial surge was partly fueled by a ₦13 billion FX revaluation gain.

However, the Central Bank of Nigeria’s directive in March prohibited banks from distributing FX currency gains as dividends or utilizing them for operational purposes.

In terms of financial performance, key highlights for Wema Bank in 2023 include a 71% rise in gross earnings to ₦226 billion, a 69% increase in net interest income to ₦91 billion, and a 44% growth in account maintenance fees to ₦3.9 billion.

Furthermore, FX transactions surged by 119% to ₦4.1 billion, while loans and advances to banks and customers expanded by 42% to ₦122 billion.

Notably, Wema Bank also witnessed a significant uptick in the value of loans disbursed to customers, rising by 53.6% to ₦801.10 billion in 2023 compared to ₦521.43 billion in the previous year.

The bank’s digital income surged to ₦745 million, with electronic product fees reaching ₦7.3 billion.

Another highlight was the success of ALAT, Wema Bank’s neobanking platform, which onboarded 2.1 million new users in 2023, although the total user base remains undisclosed.

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