Bank in Rwanda hit hard with $10.3 million fraud attack

I&M Bank Rwanda affiliate loses a staggering $10.3 million in less than three months due to fraudulent client withdrawals.
Investigations are underway to recover the lost funds as the bank discloses the incident in its annual report.
The financial blow exceeds the bank's net profit from the Rwandan market in the previous fiscal year, prompting concerns about security measures and potential insurance coverage.

Fraudulent client withdrawals cost the I&M Bank Rwanda affiliate $10.3 million in less than three months, prompting investigations to try to reclaim the money.

The money was lost between November 1 of last year and January 17, and it exceeds the $7.6 million net profit that I&M Group achieved from the Rwandan market in the fiscal year ending in December 2022. Prior to the annual meeting of shareholders, I&M Group disclosed the information in its annual report following the conclusion of the fiscal year.

“Subsequent to year-end, management of I&M Bank (Rwanda) PLC discovered incidents of fraudulent withdrawals through customer wallets amounting to $10.3 million during the period 1 November to 17 January 2023,” said the group in the annual report. “As of the date of these financial statements, some recoveries have been made and investigations are still ongoing.”

In order to protect themselves from financial loss, banks insures cash on hand, cash in the bank, and cash in transit. As a result, underwriters may be responsible for some I&M losses.

Through the purchase of a majority position in Banque Commerciale du Rwanda, I&M Bank entered Rwanda in 2012 and now controls a 54.47% stake through BCR Investment Company. By December 31, the stake was worth $15.4 million.

The Rwandan division has been I&M's most successful company outside of Kenya, serving more than 65,000 clients through around 18 locations, 33 ATMs, and more than 400 personnel.

I&M Rwanda ended 2022 with a net profit of $7.6 million, down from $73 million the year before, while its operations in Mauritius and Uganda had net profits of $4.7 million and $2.1 million, respectively.

I&M Kenya's net earnings increased from $54 million to $74.6 million over the same time period that the Tanzanian company reported a $3.7 million net loss, increasing the group's profitability by 37% to $82 million.