The Central Bank of Nigeria (CBN) has revoked Heritage Bank Plc’s banking license immediately, citing persistent financial instability and regulatory breaches. This decision aligns with the CBN’s mandate to uphold a stable financial system in Nigeria, as outlined in Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
Heritage Bank’s poor performance posed a significant threat to Nigeria’s banking sector. Despite the CBN’s various supervisory measures to address its declining financial health, the bank failed to improve. Consequently, the CBN had no choice but to revoke its license.
In a press release on Monday, the CBN disclosed that Heritage Bank had violated Section 12(1) of BOFIA 2020, necessitating regulatory intervention. The bank’s continuous underperformance jeopardized financial stability, leading to the revocation of its license.
The CBN emphasized that this action is crucial to maintain public confidence in the Nigerian banking sector and ensure the integrity of the financial system.
The Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the liquidator of Heritage Bank, in accordance with Section 12(2) of BOFIA 2020. Customers of the bank may receive up to N5,000,000 payment from the NDIC, depending on their total deposits.
INSIGHT:
Heritage Bank Plc began operations in Nigeria as a regional bank on March 14, 2013, acquiring the structure of the old Societe Generale Bank of Nigeria. In October 2014, it acquired defunct Enterprise Bank, transforming into a national bank. The IMF’s staff report on Nigeria highlighted three commercial banks, including Heritage Bank, placed under a special supervisory regime by the CBN due to their inability to meet capital requirements.
