CBN revokes Heritage Bank’s licence over financial instability

The Central Bank of Nigeria (CBN) has revoked the banking licence of Heritage Bank Plc.

This action, according to the apex bank, was taken under Section 12 of the Banks and Other Financial Act (BOFIA) 2020.

It comes in response to the bank’s ongoing financial difficulties and breaches of the regulatory framework.

According to a press release from the CBN, the decision to revoke Heritage Bank’s licence was necessitated by the bank’s failure to improve its financial performance despite various supervisory measures prescribed by the CBN.

The persistent decline in the bank’s financial health posed a significant threat to the stability of Nigeria’s financial system, the apex bank said.

It has been rumoured for a while that the beneficial owner of Heritage Bank is a former Central Bank Governor and that the bank has enjoyed forbearance over its weak financial position.

“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 press statement stated.

The CBN noted that the action is aimed at maintaining public confidence and ensuring the robustness of the financial system.

“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 apex bank stated.

It added that the Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the liquidator of Heritage Bank, as stipulated by BOFIA 2020.

Hakama Sidi Ali, Acting Director of Corporate Communications at CBN, who signed the statement, assured the public that the Nigerian financial system remains strong and that the central bank is committed to taking all necessary steps to safeguard its stability.

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