Nedbank has revealed it has closed more than 190 suspect client accounts in 2023 due to reputational concerns. The bank revealed this in its 2023 integrated report, which was published on Thursday, according to Fin24.

The report also showed Nedbank lost R50m even after insurance recoveries due to internal fraud in 2023.

Nedbank has been embroiled in several high-profile account closures, the most public of which involved a series of legal battles with Iqbal Survé's Sekunjalo group.

‘Decisions to terminate banking relationships with clients are neither arbitrary nor discriminatory and are taken extremely seriously, as clients are the essence of our business,’ Nedbank said in the report, adding: 'As a result of our ongoing reviews of client activity and related reputational risks, during 2023 we offboarded just over 190 clients. Such decisions are taken only after a rigorous assessment and an internal independent governance process with reference to all the relevant information and facts have been followed, including a comprehensive due-diligence process overseen by the board.

The closure of suspect accounts comes against the backdrop of SA being added to the Financial Action Task Force greylist in February 2023.

The Financial Intelligence Centre also reported a 59% spike in reported suspicious transactions in 2023, while the SA Banking Risk Information Centre saw a steep rises in digital banking fraud, with losses in 2023 surging 45% to over R1bn, the report reads.

Interestingly, notes Fin24, Nedbank revealed in the report that it was itself the victim of an internal fraud in 2023.

While it said no client funds were affected, the cost to Nedbank – net of insurance recoveries – amounted to R50m.

The bank also received fines, administrative sanctions or penalties amounting to R17m in 2023, down from about R25m in 2022, which related to the contravention of regional-specific regulator or legislative requirements in the UK and certain SADC countries outside of SA.

Nedbank also again reiterated that it continues to co-operate with various inquiries and investigations into certain transactions mentioned in the Zondo Commission report into state capture.

Full Fin24 report