THE Central Bank of Nigeria (CBN) has revoked the operating licence of Heritage Bank Plc with immediate effect.
The CBN Acting Director of Corporate Communications, Hakama Sidi Ali, disclosed this in a statement on Monday, June 3, stating that the action became necessary due to the bank’s breach of Section 12 (1) of Banks and Other Financial Act (BOFIA) 2020.
“The Central Bank of Nigeria (CBN), in accordance with its mandate to promote a sound financial system in Nigeria and in 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.”
According to CBN, Heritage Bank’s board and management had failed to improve the bank’s financial performance, a situation which it said constituted 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 apex bank said.
The CBN also stated that it revoked the licence to strengthen public confidence in the banking system and ensure that the soundness of the country’s 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,” CBN added.
In 2016, Heritage Bank was reported to be in distress and might not discharge obligations to shareholders. However, the CBN later dispelled the claim as untrue.
In October 2021, The ICIR reported that a House of Representatives committee threatened to ask CBN to take over the bank over vast sums of money it owed the Federal Government.
The ICIR reports that Heritage Bank is not listed on the Nigerian stock market, as such its financial records are not published by the Nigerian Exchange Group.
But over the years, CBN has severally insisted that the banking system in Nigeria remains safe, sound, and stable, despite the headwinds confronting the economy.