The Central Bank of Nigeria (CBN) has revoked the banking license of Heritage Bank Plc, effective immediately, citing the bank’s persistent poor financial performance and the resulting threat to financial stability. This decision was announced by Sidi Ali, the Acting Director of the Corporate Communication Department of the CBN, in a statement issued on Monday.
According to the CBN, the management of Heritage Bank has been unable to address the ongoing financial decline despite numerous supervisory interventions by the regulator. The apex bank noted that with no reasonable prospects of recovery, this decisive action was necessary to protect the integrity of the financial system and maintain public confidence.
The revocation underscores the CBN’s commitment to ensuring the stability and health of Nigeria’s banking sector, particularly in cases where individual banks fail to meet regulatory standards and pose risks to the broader financial system. Heritage Bank’s license withdrawal serves as a warning to other financial institutions about the importance of adhering to regulatory requirements and maintaining robust financial health.
“The Nigerian financial system remains on a solid footing.”
“We are committed to ensuring the safety and soundness of our financial system, and this action reflects that commitment,” the statement added.
The Nigeria Deposit Insurance Corporation has been appointed as the liquidator of Heritage Bank, following the Banks and Other Financial Act 2020.
This move is seen as a significant step by the CBN to maintain the stability of the financial system and protect depositors’ funds. The public has been assured that the revocation of Heritage Bank’s license will not impact the overall health of the financial system.
The statement read, “The Central Bank of Nigeria (CBN), following its mandate to promote a sound financial system in Nigeria and 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 under 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.”