First Bank, Nigeria's oldest bank,  has been hit by a massive fraud that led to the theft of  N7 billion from customer accounts by unknown  individuals, according to  a person with direct knowledge of the matter. Three other  people, who asked not to be named  and discussed sensitive matters  about the company, confirmed the  incident.
The scale and complexity of the incident  highlights the increasingly sophisticated nature of fraud in Nigeria's financial services sector. Nigerian banks lost  N43 billion to fraud in  the second quarter of 2024,  but these figures are likely  understated. According to a report by the Nigeria Interbank Settlement System (NIBSS), only 60  out of 163 financial institutions in Nigeria  have reported  cases of fraud; many choose not to report incidents  for fear of  damaging their reputations. The First Bank fraud  incident, which  is said to have started several months ago, involved the  unauthorized diversion of funds from  multiple customer accounts. While the exact mechanism of the fraud remains unknown, three people with knowledge of the incident said the stolen funds were  transferred to multiple bank accounts, including those of two fintech companies, a tactic  used by fraudsters to obscure the trail of illicit  funds, making it difficult for law enforcement to  track and recover the  money.
Despite the  significant amount involved, the fraud  allegedly went undetected for months, suggesting significant internal control  weaknesses. In May 2024, TechCabal reported that a First Bank employee fraudulently  transferred N40 billion over a  period of two years before  it was finally discovered. Two people with direct knowledge of the matter  say that a full audit of the  bank found that the total amount  of money owed to the employee was  about N60 billion. The incident led to the  layoff of 100 employees and  is believed to be  related to the abrupt  departure of the bank's CEO.
First Bank did not respond to a request for  comment for this story.
According to two people with knowledge of the matter, First Bank has  initiated the  collection process and reported the  matter to law enforcement. Banks and  fintechs typically work with police and courts to recover stolen funds. It  is not yet known whether First Bank has taken legal action  in this regard.

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