The Central Bank of Nigeria (CBN) has revoked the licence of the embattled Heritage Bank plc.
The action confirms metrobusinessnews.com (MBN) stories of recent, questioning the assertion of Yemi Cardoso, CBN governor that the sector remains safe, sound and solid .
MBN, had since the begining of the recapitalisation exercise continued to advocate for proper monitoring of some of the banks as some of the lenders, including those under the superintendency of the regulators have some challenges that require either regulatory forbearance or outright mergers to allay fears and as well strengthen the sector and the economy.
But in a release by CBN today, it said, the bank had intervened some sectors of the Act that deal with its liquidity and soundness.
”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.
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.
Consequently, the CBN has taken this action to strengthen public confidence in the
banking system and ensure that the soundness of our 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.
Hakama Sidi Ali (Mrs.)
Ag. Director, Corporate Communications.”
Sources close to the bank told MBN that the action on the bank by CBN, which has recently sacked almost have of its staff strength, is long overdue.
Besides, analysts have continued to query the foundation of the bank, which was an upshoot of the defunct Societe Generale Bank, (SGBN), for which the regulators have not told the public what really happened before the bank went under and neither was those responsible for the collapse of the bank, apprehended, at least, not to the public knowledge, nor fuller explanation on the demise and power play given.
ALSO READ ;Blackout Across Nigeria As Workers Shut Down National Grid
Specifically, the bank traces its roots to the late 1970s, when it was founded as Societe Generale Bank (Nigeria), by the late Dr. Olusola Saraki. In January 2006, CBN closed down SGBN on account of failure to meet new minimum capital requirements of NGN:25 billion for a National Bank.
The bank successfully challenged the closure in court. In December 2012, CBN re-issued Societe Generale’s banking license, but as a regional bank.
Having acquired the banking license, the new ownership re-branded the bank as Heritage Banking Company Limited and opened for business under the new name on 4 March 2013.
In October 2014, Heritage Banking Company Ltd successfully met the requirements of the Asset Management Corporation of Nigeria (AMCON) and the Central Bank of Nigeria toward owning 100% shares in Enterprise Bank Ltd.
On 27 January 2015, AMCON officially transferred ownership of Enterprise Bank Ltd to Heritage Bank Plc.
The bank has on several occasions been engulfed in internal squabbles with different fractions between those loyal to the former owners of SGBN and the new investors.
The development led to the resignation of one of the top Management staff representing the interests of the faction protecting the interests of the owners of the defunct SGBN.
