An Evaluation of Fraud and Deposit Money Banks’ Profitability in Nigeria: (2009-2018)

Abstract

This work evaluates Fraud and Profitability of Deposit Money Banks (DMB’s) in Nigeria for ten years (2009-2018); with the specific objective of assessing whether the rate at which fraud occurs, the number of persons involved in fraud, the amount targeted in fraud and the loss that the banks incurred to fraud has significant impact on Profitability for the period. Using Regression Analysis on historical data from Nigeria Deposit Insurance Corporation (NDIC) Reports, we found out that there exists a strong positive correlation between DMB’s Fraud and Profitability at more than 90%; and judging by our data analytics at 5% level of significance, the frequency of fraud, fraud amount and monies that could not be recovered from fraud proved to assert strong influence on the profitability of DMB’s in Nigeria with only Fraud Involvement proving insignificant. To mitigate fraud, we recommend that banks create fraud policies that are robust enough to prevent fraud perpetrators from committing fraud and a Whistleblowing System (WBS) that guarantees protection for a Whistle Blower.