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CBN Revokes Heritage Bank’s License Over Financial Instability


The Central Bank of Nigeria (CBN) has revoked the banking license of Heritage Bank Plc with immediate effect.

The apex bank announced the decision on June 3, 2024 in a press statement published on its website same day. The statement was signed by the CBN’s Acting Director, Corporate Communications, Hakama Sidi Ali.

The bank said the decision followed Heritage Bank’s persistent failure to comply with regulatory requirements, as stipulated under Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2020.

Heritage Bank, a once-promising financial institution with deep historical roots and a substantial presence across the nation, has been struggling in recent years.

“This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. 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 emphasised that the bank’s inability to turn around its fortunes presented a growing threat to the stability of Nigeria’s financial system, leaving the CBN with no choice but to take decisive action.

“Consequently, the revocation of the license was necessary to strengthen public confidence in the banking system and ensure that the soundness of our financial system is not impaired,” the statement said.

Following the revocation, the Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the liquidator of Heritage Bank, in accordance with Section 12 (2) of BOFIA 2020.

The appointment of a liquidator is intended to manage the bank’s liquidation process and protect the interests of depositors and other stakeholders.

The CBN, however, assured the public that Nigeria’s financial system remained robust and on a solid footing despite this significant development.

Heritage Bank’s journey began in the late 1970s as Societe Generale Bank (Nigeria), founded by the late Dr. Olusola Saraki.

Societe Generale Bank experienced significant growth but faced challenges in 2006 when it was closed by the CBN for failing to meet new minimum capital requirements.

Societe Generale successfully challenged the closure in court, and in December 2012, the CBN re-issued its banking license as a regional bank.

In 2012, IEI Plc, through its subsidiary IEI Investments Limited, acquired the Societe Generale Bank of Nigeria license from the CBN.

Following this acquisition, the bank was rebranded as Heritage Banking Company Limited and resumed operations under the new name on March 4, 2013.

The bank made significant strides, including the acquisition of Enterprise Bank Limited in October 2014, a nationalized financial services provider with over 160 branches and assets valued at $1.6 billion.

This acquisition, valued at $340 million, positioned Heritage Bank as a formidable player in the Nigerian banking sector.

By December 2015, Heritage Bank had amassed total assets valued at over $1.7 billion (NGN:483.4 billion) and shareholders’ equity of at least $88 million (NGN:25 billion), meeting the CBN’s minimum capital requirements for national banks.

Despite its rapid growth and expansion, Heritage Bank faced mounting financial challenges. The bank’s management struggled to sustain its financial performance, leading to a decline that persisted despite the CBN’s interventions.

The CBN’s decision to revoke Heritage Bank’s license reflects its broader mandate to promote a sound financial system in Nigeria.

The move is part of ongoing efforts to ensure that financial institutions operate in a manner that safeguards the interests of depositors and maintains public confidence in the banking system.

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