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Exclusive: Heritage Bank Top List Of Financial Institutions To Be Merged By CBN-Source



CBN Governor, Yemi Cardoso and Managing Director/CEO Heritage Banking Co Ltd, Akin George-Taylor

An inside source at the Central Bank of Nigeria (CBN), has revealed exclusively to that Heritage Bank is one of the topmost financial institutions to be either merged or sold soon by the apex bank in Nigeria.

This revelation comes amidst the recent sudden sack of the management and board of Keystone Bank, Polaris Bank, and Union Bank.

Speaking exclusively to The Octopus News, the source who gave his name as Moses Abijo (Not Real Name) noted that following the appointment of new executives to the aforementioned Deposit Money Banks (DMB), the next phase of the financial sector restructuring which the CBN Governor, Yemi Cardoso is set to implement is the stabilization of the banks in the country.

According to him, Cardoso thinks that a lot of banks in Nigeria are not stable enough to handle an ideal economy.

Recall that while giving a keynote speech at the 2023 Annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN), on Friday, November 24, Cardoso said that the CBN is set to introduce a new set of foreign exchange laws and guidelines to tackle Naira depreciation and achieve exchange rate stability.

He also unveiled plans for a new recapitalisation exercise for the banking industry which will see banks in Nigeria  increasing their minimum capital base to a level sufficient to support the vision of a $1 trillion economy.

At the event, Cardoso said; “Our monetary policies will aim to achieve price stability, foster sustainable economic growth, stabilize the exchange rate of the naira, and reduce interest rates to facilitate borrowing and investments in the real sector. To ensure the proper functioning of domestic and foreign currency markets, clear, transparent, and harmonized rules governing market operations are essential.

“New foreign exchange guidelines and legislation will be developed, and extensive consultations will be conducted with banks and FX market operators before implementing any new requirements.

“Considering the policy imperatives and the projected economic growth, it is crucial for us to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is not just about the stability of the financial system in the present moment, as we have already established that the current assessment shows stability.

“However, we need to ask ourselves: Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1.0 trillion economy shortly? In my opinion, the answer is “No!” unless we take action.

“Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will be directing banks to increase their capital.”

Interestingly, one issue that has consistently trailed Heritage Bank remains its capital liquidity ratio.
The situation has spurred several reports of depositors not being able to withdraw their funds from the bank.

Not too long ago, there were reports of the bank’s failure to remit over N710 million to Shehu Mudi and 656 others. The situation subsequently led to a court order sealing the branches of the bank across Nigeria.

As far back as 2016, Sahara Reporters reported that First Bank Plc, which handles Heritage Bank’s universal clearing activities, had threatened to blacklist the bank and stop further clearing transactions if its outstanding deficit of over N5billion is not cleared.

According to several reports, Heritage Bank’s challenges aside from its liquidity ratio issue include its inability to offer good customer service, delayed transfers, inability to move depositor funds, and the failure of the bank’s apps to function properly.

Another problem that has been continuously associated with the bank is its non-performing loans (NPLs) portfolio, which is amongst the most challenged in the industry.

For financial sector stakeholders who have acknowledged the array of issues bedeviling the bank, the move by the CBN is a welcome development.


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