First Bank, Nigeria’s oldest bank, has reportedly fallen victim to a significant fraud incident resulting in the theft of ₦7 billion from customer accounts. This news comes from sources with direct knowledge of the situation, alongside confirmations from additional individuals who preferred to remain anonymous because of the sensitive nature of the matter.
Nature of the Fraud
The incident reflects the growing sophistication of fraud in Nigeria’s financial services sector. Reports indicate that Nigerian banks lost ₦43 billion to fraud during the second quarter of 2024, but this number may be too low. A report from the Nigeria Inter-Bank Settlement System (NIBSS) indicated that only 60 out of 163 financial institutions reported fraud cases, with many opting not to disclose incidents to avoid reputational damage.
The fraudulent activities at First Bank began several months ago and involved the unauthorized diversion of funds from various customer accounts. Although investigators don’t yet understand the exact methods used in this fraud, their investigations suggest that the thieves transferred the stolen funds to multiple bank accounts, including those of two FinTech companies. Fraudsters commonly employed this tactic to obscure the trail of illicit funds, complicating efforts by law enforcement to trace and recover the money.
Internal Control Failures
Despite the substantial amount involved, the fraud reportedly went undetected for months, indicating significant gaps in the bank’s internal controls. In a prior incident reported by TechCabal in May 2024, a First Bank employee diverted ₦40 billion over two years before being discovered, with audits later revealing the total diversion to be around ₦60 billion. This earlier case led to the dismissal of 100 employees and was linked to the unexpected resignation of the bank’s CEO.
Recovery Efforts
First Bank has initiated recovery efforts and has reported the fraud incident to law enforcement. Typically, banks and FinTech companies collaborate with police and judicial authorities to recover stolen funds, although it remains unclear whether First Bank has pursued legal action in this case.
First Bank has not responded to requests for comment regarding the recent fraud incident. As the situation unfolds, the bank’s ability to address these internal control weaknesses and restore trust among its customers will be crucial.
