Heritage Bank goes under, again
The CBN said the action is to strengthen public confidence in the banking system and ensure that the soundness of the financial system is not impaired.
Despite the apex bank’s hammer bringing to an end a once-promising financial institution brand, the market appears stable.
It is a welcome development witnessing the resilience of the banking and wider financial services sector that this regulatory action of the Central Bank of Nigeria (CBN) is not leading to panic. There is also the assurance of depositors’ funds insured up to ₦500,000 each, giving comfort on the recovery of the funds.
In a statement released Monday, June 3, signed by Hakama Sidi Ali, CBN’s Acting Director of Corporate Communications, the bank stated: In accordance with its mandate to promote a sound financial system in Nigeria and in the exercise of its powers under Section 12 of the Banks and Other Financial Act (BOFIA) 2020, hereby revokes the licence of Heritage Bank Plc with immediate effect. This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020.
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The defunct bank has had a chequered history right from its days as Societe Generale Bank (Nigeria). When it could not meet the new minimum capital requirements, which were then pegged at ₦25billion, its licence was revoked.
Founded by the late Olusola Saraki, the bank was a novelty of sorts, pioneering ATMs to make banking easier for customers.
Its licence was restored after the intervention of the courts, with the new owners rebranding to become Heritage Bank. In 2014, it acquired Enterprise Bank with a view to expanding its retail footprints. The retail expansion scheme led to a network of 127 branches and 350 ATMs across the country.
CBN Revokes the Banking Licence of Heritage Bank Plc…
Kindly click on the provided link to read more:https://t.co/PylKNfQiLo pic.twitter.com/Dt5HAHHLAX
— Central Bank of Nigeria (@cenbank) June 3, 2024
Adducing reasons for closing the bank, the CBN declared: The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.
This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.
The CBN said the action is to strengthen public confidence in the banking system and ensure that the soundness of the financial system is not impaired. The Nigeria Deposit Insurance Corporation (NDIC) is hereby appointed as the Liquidator of the bank in accordance with Section 12 (2) of BOFIA, 2020.
We wish to assure the public that the Nigerian financial system remains on a solid footing. The action we are taking today reflects our continued commitment to take all necessary steps to ensure the safety and soundness of our financial system.
The Saraki family, which is believed to still have a strong interest in the defunct bank, has yet to issue a statement. Its leading light, Senator Bukola Saraki, a strong member of the opposition PDP, may have a different view. The bank could yet reenact the earlier battle with the apex bank in which it emerged as the winner.
Adewole Ojo is the Editor-in-Chief of Meiza Nigeria. He can be reached on adewole.ojo@fourpoints.ng.
