Heritage Bank going down, as Akinola George-Taylor fails to attract strategic investors

It appears that the management of Heritage Bank is making no progress in luring strategic investors to save the lender from bankruptcy.

Heritage Bank, one of Nigeria’s promising banks that started banking operations in 2013, is having financial difficulties. Those connected to the bank fear that if immediate action is not done, the Nigerian banking sector may soon lose another bank.

The banking license for Societe Generale was reissued in December 2012 by the Central Bank of Nigeria (CBN), but this time as a regional bank. After obtaining the banking license, the new owners renamed the bank as Heritage Banking Company Limited, and on March 4, 2013, it reopened for operation.

In order to acquire 100% of the shares in Enterprise Bank Ltd., Heritage Banking Company Ltd. successfully fulfilled the requirements set forth by the Asset Management Corporation of Nigeria (AMCON) and the Central Bank of Nigeria in October 2014.

AMCON formally gave Heritage Bank Plc ownership of Enterprise Bank Ltd. on January 27, 2015.

An investigation found that the bank has been dealing with a number of problems that were once thought to be common but that approximately five years ago had become concerning.

The bank has struggled to stay viable over the past five years and under its first CEO, Dr. Iffie Sekibo, failing stress tests multiple times.

The bank has been searching for strategic investors for almost five years, but has not been successful in finding one, according to a prominent banker and former executive director who wishes to remain anonymous.

He said, “Heritage Bank was meant to play big and give Tier1 banks a big chase but this couldn’t happen because the bank took some wrong steps along the line.

“Some investors who had shown interest over the years have been retracting after check­ing the books. The bank is highly indebted and no serious investor will want to do business with an ailing bank”.

According to investigation, the bank is one of the handful that the Central Bank of Nigeria ordered to seek for “strategic” investors after it failed its stress test.

The main problem is the high level of debt.

The examination found that the bank’s operations are being hampered by loans or other debt obligations.

The extent of the debt crisis, our source said, “The bank needs an injection of funds. If you inject N600 billion into the opera­tions of the bank today, it will not be enough. How many investors will be ready to pump close to a trillion naira into the bank?

“This will be a tall dream”.

Notably, the bank is alleged to owe money to FirstBank, which visits the CBN’s special window, the Standing Lending Facility (SLF), and acts as a clearing bank for the CBN.

Banks that are experiencing liquidity problems might turn to the Special Lending Window (SLF), which is being used by an increasing number of banks.

Month on month (MoM), borrowing from the apex bank’s Standing Lending Facility surged by 559 percent, from N57.14 billion in October 2023 to N376.64 billion in November 2023.

Bank deposits in the apex bank’s Standing Deposit Facility decreased MoM by 18% to N2.4 trillion in November from N2.94 trillion in October, according to details from the CBN financial statistics for November 2023.

Isiaka Kuwaj, an investment banker, stated that although the CBN was advised to keep the bank from collapsing by banking experts, this suggestion was not followed.

He said, “If the CBN was talking about banks who may not be able to play in the envisioned new economy, Heritage Bank is one of them. The bank is losing its grip and it must be rescued to safeguard depositors’ funds.

“If you look critically at the bank and its operations, you will see that there is a systemic ma­nipulation of processes. The new leadership of the bank, led by Tay­lor, seems not to have the magic wand to turn the bank around.

“Since the retirement of Dr. Sekibo, the bank has gone to sleep and it may remain in its slumber state if nothing is done to sell the bank or bring in fresh investors with clear ideas of operating a bank”.

The board of directors of the bank under the leadership of Mr. Akinola George-Taylor as the substantive Managing Director/ Chief Executive Officer of the bank which promised to imple­ment the lender’s next phase of transformation, Daily Indepen­dent learnt, is still optimistic that the bank will soon attract a stra­tegic investor in the desire to turn it around.

When contacted on Wednes­day according to Daily independent Ozena Utulu, Group Head, Corporate Communications of the bank, said the bank is “mak­ing progress” in their discussion with investors.