What’s this about?
- The Central Bank of Nigeria (CBN) revoked Heritage Bank’s licence due to financial instability and a breach of Section 12(1) of the Banks and Other Financial Institutions Act 2020.
- Heritage Bank has been struggling financially for years, failing to attract strategic investors and improve its financial performance despite CBN’s supervisory efforts.
- Customers have recently faced difficulties accessing their deposits, exacerbating concerns about the bank’s financial health and stability.
Zoom in…
The Central Bank of Nigeria has revoked the licence of Heritage Bank following a breach of Section 12(1) of the Banks and Other Financial Institutions Act 2020.
According to the CBN, the bank has been unable to improve its financial performance, thus threatening its financial stability.
Section 12 of the Act grants the apex bank the authority to revoke a financial institution’s licence if the institution fails to meet a list of ten conditions, including being critically undercapitalised, involved in a situation that threatens its financial stability, conducting business in an unsound manner, or having insufficient assets to meet its liabilities.
Last year, local media reported that Heritage Bank had been in talks to get strategic investors for about five years with little success.
A few weeks ago, customers also complained about difficulties accessing deposits. While the bank stated that it had reportedly undergone a system refresh exercise, hence the delays, customers were still unable to access deposits even after the exercise.
What they are saying…
“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,” a statement by the CBN read.
“Heritage Bank was meant to play big and give Tier1 banks a big chase, but this couldn’t happen because the bank took some wrong steps along the line. Some investors who had shown interest over the years have been retracting after checking the books. The bank is highly indebted, and no serious investor will want to do business with an ailing bank,” a former executive at the bank said.
Source: techpoint.africa
