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Another bank loses Sh300 million to ‘smart’ employees

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The National Bank of Kenya (NBK) incurred losses estimated at Ksh300 million last year to fraud perpetuated by its own employees and cybercrime attacks.

Business Daily reports quoting the bank’s latest annual report, that “operational losses including fraud losses (were) recorded at 3.0 per cent of total revenue made in 2016.”

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Based on the Ksh11 billion revenue in the year to December 2016, Business Daily figures that NBK could have taken a hit of up to Ksh330 million.

“The risks are inherent in the ICT systems used by the bank, people relied on to perform certain activities, processes being used and exposure to threats from the external environments where the Bank operates,” reads NBK’s report.

A study by Deloitte shows that the most prevalent forms of financial crime reported in Kenya are cash theft, cheque fraud, plastic money scams, and electronic funds transfer fraud.

The bank did not disclose how much was recovered out of the gross fraud loss, the number of staff implicated, or the disciplinary actions taken. It has hired personnel and deployed technology to counter fraud.

See also: How Barclays employees stole Sh146 million

The NBK now joins Barclays  and KCB Group  as the only lenders in Kenya who have revealed banking fraud statistics. Barclays Bank of Kenya last month revealed that fraud losses more than doubled to Ksh145.9 million last year from Ksh59 million in 2015.

Barclays said it recovered Ksh86.7 million arising from 196 disciplinary cases, adding that the net amount lost to fraudsters was Ksh59.2 million, involving 122 claims of theft.

KCB Group, Kenya’s biggest bank by assets, also revealed it sacked 31 employees in 2016 due to fraud and professional negligence, compared to the 33 employees fired in 2015 and about 90 workers in 2014.



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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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