The Nigerian Deposit Insurance Corporation (NDIC) has announced that the repayment of depositors from Heritage Bank will commence before the end of this week. This was disclosed by NDIC Managing Director, Bello Hassan, during a briefing on the liquidation of the bank held in Abuja on Wednesday.
Heritage Bank’s banking license was revoked by the Central Bank of Nigeria (CBN) on Monday, prompting the NDIC to begin the liquidation process.
Hassan revealed that Heritage Bank’s total deposits stand at ₦650 billion, while its loan portfolio exceeds ₦700 billion. He assured that the NDIC aims to ensure loan repayment within the next six months.
The NDIC MD explained that all depositors are currently being verified for the payment of insured benefits up to ₦5 million. Depositors with balances above ₦5 million will receive their remaining funds after the bank’s assets are sold.
Hassan emphasized, “The assurance of the payment by the NDIC will give hope to the customers of Heritage Bank who have been in a state of panic following the revocation of the bank’s license.”
Heritage Bank has approximately 2.3 million depositors, with 99 percent holding balances below ₦5 million. The bank operates 116 branches nationwide.
The CBN revoked Heritage Bank’s license to promote a sound financial system in Nigeria, exercising its powers under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020. The CBN cited the bank’s failure to adhere to Section 12 (1) of BOFIA, 2020, and its inability to improve its financial performance as reasons for the license revocation.
Hakama Ali, the Acting Director of Corporate Communications at the CBN, stated, “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.”
He added that despite the CBN’s supervisory efforts, the bank continued to decline with no reasonable prospects of recovery, making the revocation necessary.
The CBN’s action aims to strengthen public confidence in the banking system and ensure the soundness of the financial system.
Consequently, the NDIC has been appointed as the liquidator of Heritage Bank under Section 12 (2) of BOFIA, 2020.