Business
FCMB Reports Nearly N1 billion Loss to Fraud and Forgery
FCMB Reports Nearly N1 billion Loss to Fraud and Forgery
FCMB Group Plc, the parent company of First City Monument Bank, recently disclosed a staggering 637.99 percent increase in fraud and forgery expenses, which soared from N123.08 million in 2022 to a substantial N908.35 million for the fiscal year that ended on December 31, 2023.
This revelation came to light through the release of the ‘unaudited annual report and financial statements for the year ended December 31, 2023’ by the bank on Friday, January 26. The reported figure stands out as the highest amount expended by the bank on fraud and forgery issues over the past five years. Notably, it accounts for 65.23 per cent of the total N1.39 billion the bank has allocated towards addressing such concerns since 2019.
A detailed breakdown of the expenses incurred by FCMB over the years reflects a worrying trend – N212.26 million in 2019, N59.04 million in 2020, N89.86 million in 2021, and N123.08 million in 2022. While the bank did not furnish specific details regarding the nature of these fraud and forgery incidents, insights from public affairs commentator and finance expert, Bala Zakka, shed light on the typical approach adopted by banks in reporting such cases.
According to Zakka, when a fraud case is identified, the loss is already confirmed, whereas forgery entails an element of uncertainty until a forensic investigation can verify the authenticity of the claim. Once validated, forgery cases are reclassified as fraudulent activities, contributing to losses that directly impact the bank’s financial performance.
Delving deeper into the ramifications of escalating fraud and forgery expenses, Abu Noruwa, a seasoned lecturer of Banking and Finance at the University of Lagos, emphasized the potential links to corruption, data concealment, or misappropriation of funds involving both internal bank staff and external entities. The historical context provided by Noruwa underscores the recurring incidents of FCMB personnel engaging in fraudulent activities, raising concerns about the bank’s internal controls and risk management measures.
Instances such as the arraignment of Kichime Gomwalk, a branch manager of FCMB, by the Economic and Financial Crimes Commission (EFCC) in March 2023 on charges related to a N55 million fraud case, highlight the gravity of the situation. Similarly, the allegations against Tope Munis, another branch manager at FCMB’s Ikeja GRA branch, in March 2022 for purportedly facilitating N1.2 billion in fraudulent transactions, underscore the urgency for enhanced vigilance and accountability within the organization.
Moreover, the prosecution of Adejare Sonde, a former FCMB staff member, by the EFCC in December 2020 on charges of theft leading to a four-year prison sentence further underscores the imperative for stringent regulatory oversight and ethical conduct across all levels of the banking industry.
In conclusion, the escalating incidences of fraud and forgery within FCMB underscore the critical need for proactive measures to strengthen internal controls, enhance employee oversight, and foster a culture of transparency and accountability. As the bank navigates these challenges, concerted efforts to bolster risk management frameworks and regulatory compliance are imperative to rebuild trust, safeguard stakeholder interests, and sustain long-term financial viability in an increasingly complex operating environment.
Safeguarding against financial malpractices and upholding ethical standards should remain paramount in shaping the bank’s strategic trajectory and fostering a resilient banking ecosystem characterized by integrity, trust, and sustainability.
