First Bank, Nigeria’s oldest financial institution, is reeling from a massive fraud that saw approximately $9.1 million siphoned from customer accounts by unidentified individuals, according to a source with direct knowledge of the situation.
Three additional sources, who requested anonymity due to the sensitivity of the matter, confirmed the incident. The scheme reportedly began months ago, involving the unauthorized diversion of funds from multiple customer accounts.
Fraudsters allegedly transferred the stolen money into various bank accounts, including those belonging to two fintech companies.
This strategy of dispersing funds into multiple accounts is a common tactic to obscure money trails and hinder recovery efforts.
The breach went undetected for an extended period, raising concerns about First Bank’s internal control mechanisms.
This incident follows a prior case in May 2024, where a First Bank employee was accused of fraudulently diverting $52.2 million over two years. Further investigations revealed the total amount stolen in that case was closer to $78.3 million, leading to the dismissal of 100 staff members and the sudden resignation of the bank’s CEO.
The latest scandal highlights the growing sophistication of financial crimes in Nigeria. In Q2 2024 alone, Nigerian banks reported a combined loss of $56 million to fraud, according to the Nigeria Inter-Bank Settlement System (NIBSS).
However, with only 60 out of 163 financial institutions reporting fraud cases, the true figures are likely higher. Many banks choose to remain silent to protect their reputations.
First Bank has initiated recovery efforts and reported the case to law enforcement, according to two sources familiar with the situation. While banks and fintech companies typically collaborate with police and courts to retrieve stolen funds, it is unclear if First Bank has pursued legal action.
The bank declined to comment on the incident when contacted.
The frequency and scale of fraud incidents in Nigeria’s financial sector underscore the urgent need for tighter regulatory oversight, improved internal controls, and enhanced collaboration between banks and fintech companies to combat financial crimes effectively.
First Bank’s case serves as a stark reminder of the vulnerabilities in the banking system and the high stakes for institutions failing to safeguard customer funds.
