The news
- The Central Bank of Nigeria (CBN) has revoked the licence of Heritage Bank due to a breach of Section 12(1) of the Banks and Other Financial Institutions Act 2020.
- The CBN said the bank has continued to suffer financially and does not have any visible prospects for discovery.
- The apex bank also said that the revocation had to be taken to maintain confidence in the company's financial system.
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.
Per the CBN, the bank has been unable to improve its financial performance, thus threatening its 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," a statement by the CBN read.
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.
"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.
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.
