Daud Olatunji
Financial institutions in Nigeria faced a hefty sum of fines in 2023, with nine prominent banks collectively paying N678 million for flouting regulations, according to an analysis of their annual reports.
This figure marked a significant decrease of 89.25 percent from the N6.31 billion penalties imposed in 2022, indicating a trend towards enhanced regulatory compliance within the industry.
The banks subjected to scrutiny included FBN Holdings, Access Holdings, Guaranty Trust Holding Company, Zenith Bank Plc, United Bank for Africa Plc, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group.
Regulatory bodies such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission, NGX Regulation Limited, FMDQ, and the National Pension Commission were responsible for sanctioning the financial groups.
Zenith Bank, which had a clean record in 2022, found itself paying N21 million in penalties in 2023.
This stark contrast was attributed to various infractions, including late rendition of CBN returns, unauthorized employment practices, outstanding auditor’s recommendations, and compliance checks on politically exposed persons.
FBN Holdings disclosed a payment of N17.26 million in penalties for regulatory breaches, a decrease from the previous year’s N26 million.
Notably, the banking group faced repercussions for late submission of audited financial statements and failure to comply with NGX RegCO requirements.
Access Holdings demonstrated a significant improvement in regulatory compliance, reducing its penalty payments from approximately N604 million in 2022 to N81.60 million in 2023.
However, the group still incurred fines from various regulators, including PenCom and NGX RegCo, for infractions related to advertising, retirement savings, and data recapture.
Similarly, GTCO reported a decrease in fines, totaling N73.98 million in 2023 compared to N4.21 billion in the previous year.
Penalties were incurred both domestically and internationally, highlighting the global scope of regulatory oversight.
UBA Group showcased a remarkable reduction in penalties, plummeting from N1.14 billion to N110 million in 2023.
The group reiterated its commitment to compliance and regulatory standards, emphasizing the integration of a robust compliance culture within its operations.
Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group experienced varying degrees of penalties and fines, reflecting ongoing efforts to address regulatory infractions and uphold industry standards.
Commenting on the trend, experts emphasized the importance of good corporate governance, risk management practices, and ethics in driving regulatory compliance within the banking sector.
While significant strides have been made, challenges such as anti-money laundering infractions persist, underscoring the need for continuous vigilance and collaboration between regulators and industry players.
Dr. Anthony Omojola, former National Coordinator of the Independent Shareholders Association of Nigeria, acknowledged the progress but called for a review of regulatory frameworks to promote economic development and ease of doing business in Nigeria.
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