The Central Bank of Nigeria (CBN) has shed more light on why it revoked the banking licence of Heritage Bank Plc.

In a “Notice of revocation of Banking licence under BOFIA 2020” signed by the Governor of the CBN, Mr Olayemi Cardoso, he gave five reasons for the apex bank’s action.

These are that Heritage Bank had, “insufficient assets to meet its liabilities; conducted its business in an unsound manner; failed to comply with specific obligations imposed upon it under the BOFIA, 2020 and the CBN Act as well as rules, regulations, guidelines and directives made under both Acts; was critically undercapitalized with a capital adequacy ratio below the prudential minimum applicable to its licence category and its financial performance and condition constituted a threat to financial stability.”

The notice also stated that the CBN took the drastic measure because the, “prescribed remedial supervisory steps taken over an extended period have failed to stem the decline of the bank.”

In a statement issued by its Acting Director, Corporate Communications, Mrs Hakama Sidi Ali, on Monday, the CBN announced that it had revoked the licence of Heritage Bank, citing the lender’s board and management’s inability to improve its financial performance.

The apex bank said the move was in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 (1) of the Banks and Other Financial Act (BOFIA) 2020, adding that it took the action to strengthen public confidence in the banking system and ensure that the soundness of the financial system was not impaired.

The regulator said that despite having engaged with the bank and prescribed various supervisory steps intended to stem its decline, the Board and management had not been able to improve the its financial performance, a situation which constituted a threat to financial stability.

It announced that the Nigeria Deposit Insurance Corporation (NDIC) had been appointed as the liquidator of the bank in accordance with Section 12 (2) of BOFIA, 2020.

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