Briefs	E-mail PagePrint Version

NIGERIAN BANK FRAUD SOARS 40%

LAGOS - Nigeria's banks have seen almost $10 million disappear through employee fraud in 2002, a rise of more than 40% on the year before, a survey by the country's banking regulator has found, according to a recent report filed by the BBC. The total amount stolen was $9.3 million, up from $6.9 million in 2001, according to the Nigerian Deposit Insurance Corporation. Ten times that amount - $99.4 million - was recorded in attempted fraud, up 15% from the $86.6 million the previous year. Most of the thefts, the NDIC said, were the result of either forgeries or illegal withdrawals from customers' accounts. The figures may well be an understatement, though, as NDIC said it believes financial institutions routinely underreport fraud losses for fear of negative publicity. Fraud and corruption have become an unfortunate staple in Nigeria's international reputation, the BBC said. The country regularly features at the top of international surveys measuring the part played by graft in different economies. Successive dictatorships have extracted billions from the exchequer, denuding the public purse of revenues from Nigeria's rich oil reserves. Outside the country, Nigeria has become synonymous with fraud as some of its citizens use the boom in internet cafes to send "spam" e-mails, promising millions in exchange for the gullible recipient's bank details.
 
JAPAN'S LARGEST BANKS REPORT RECORD LOSSES

TOKYO - Japan's four largest banking companies today reported a combined loss of 3.6 trillion yen, or almost $31 billion, for the last fiscal year, a 28 percent increase, as stock prices declined and stricter accounting methods unearthed more bad loans, says the New York Times. The losses were largely within expectations, but did little to comfort investors and analysts who say that Japan's bad-loan crisis is far from over. While the banks wrote off 30% fewer loans compared with the previous year, deflation is worsening, the stock market remains near 20-year lows and the economy is inching toward another recession. This harsher environment, on top of the banks' deep losses, has made it more difficult for them to generate profits from their lending business. Yet the banks, as in years past, say they expect to return to profitability in the current fiscal year, which runs through March 2004. They also hope to write off fewer bad loans, though they still hold almost $150 billion in loans that are in arrears. In the fiscal year ended in March, the Mizuho Financial Group, the world's largest banking company by assets, lost about $20.3 billion, a record for a Japanese company. The three other big banks - the Sumitomo Mitsui Financial Group, the Mitsubishi Tokyo Financial Group, and UJF Holdings - posted far smaller losses, writing off a combined $38.5 billion in non-performing loans. This fiscal year, Mizuho said it expects to earn the equivalent of about $1.9 billion. Sumitomo Mitsui and UFJ Holdings each expect about $1.3 billion in earnings. Mitsubishi Tokyo projects a profit of slightly more than $1.6 billion.

ALLIED IRISH SUES BofA AND CITIBANK

NEW YORK - Ireland's largest bank has brought suit against Bank of America and Citibank, accusing them of helping a former currency trader hide $691 million in losses. Allied Irish Bank alleges that the defendants helped a former employee of Allfirst Financial who was sentenced in January to 7 1/2 years in prison for fraud, hide losses from his employer. Allfirst was a subsidiary of Allied Irish. The former employee ran up the losses over five years, mostly from trading Japanese yen, in what became one of the largest bank fraud cases in US history. Prosecutors said he dug himself a deeper hole by taking ever-larger risks as he tried to recoup the money he had lost. The lawsuit seeks $500 million in damages and an unspecified amount in punitive damages. Allied Irish said in court papers that the worker hid his losses from 1997 until early 2002 by booking fictitious trades, manipulating Allfirst's internal controls and engaging in other misconduct. The lawsuit alledges Bank of America and Citibank in September, 2000 joined in the employee's scheme by opening "prime brokerage" accounts for him and then helping him hide ever-growing losses from Allfirst.

Go back, or read the latest briefs:

TRADE

empty