Wema Bank tightens security after ₦685 million fraud loss in 2023

Wema Bank, a Nigerian tier-2 bank that holds ₦1.8 trillion ($1.6 billion) in consumer deposits, reported ₦685 million ($594,943) in fraud and forgery losses in 2023, highlighting the scale of fraud in Nigeria’s financial services sector.

“These were aggregate losses from our digital and collection/payment channels, including third parties connected through our platform,” a spokesperson for Wema Bank told TechCabal. The spokesperson also cited KYC (Know Your Customer) and compliance issues.

The bank is working on strengthening its fraud monitoring process and has hired more people in its digital compliance department. It also claimed that the number of fraud cases in Q1 2024 declined sharply. TechCabal could not independently verify this claim as the bank has not released its Q1 2024 results.

“We do not anticipate similar volumes in the 2024 financial year.”

Despite these fraud concerns, Wema Bank recorded impressive growth in 2023, tripling its profits from ₦11 billion in 2022 to ₦35 billion. That three-fold boost was partly thanks to a ₦13 billion FX revaluation gain. In March, the CBN barred banks from paying out FX currency gains as dividends or drawing on them for operational expenses.

Key takeaways

Gross earnings were up 71% to ₦226 billion from ₦133 billion in 2022

Net interest income up 69% to ₦91 billion from ₦54 billion in 2022

Account maintenance fees grew 44% to ₦3.9 billion from ₦2.7 billion in 2022

FX transactions grew 119% to ₦4.1 billion from ₦1.8 billion in 2022

Loans and advances to banks and customers grew 42% to ₦122 billion from ₦85 billion in 2022.

Additionally, Wema recorded an impressive return from loans offered to customers. The value of those loans rose by 53.6% for full-year 2023 at ₦801.10billion, up from the ₦521.43 billion disbursed in 2022.

The bank also grew its digital income to ₦745 million and brought in a whopping ₦7.3 billion in fees on electronic products.

Another bright spot was ALAT, Wema’s neobanking offering. The digital bank added 2.1million new users in 2023, although it is unclear how many total users it currently has.