Heritage Bank management’s effort at attracting strategic investors to pull the lender back from the brink seems futile.
Those close to the bank fear if urgent steps are not taken, the Nigerian banking community may soon lose another bank as things have been turning south for Heritage Bank, one of Nigeria’s promising banks, which began banking operations in 2013.
In December 2012, the Central Bank of Nigeria (CBN) re-issued Societe Generale’s banking licence, but as a regional bank. Having acquired the banking licence, the new ownership re-branded the bank as Heritage Banking Company Limited and opened for business under the new name on March 4, 2013.
In October 2014, Heritage Banking Company Ltd successfully met the requirements of the Asset Management Corporation of Nigeria (AMCON) and the Central Bank of Nigeria toward owning 100% shares in Enterprise Bank Ltd.
On January 27, 2015, AMCON officially transferred ownership of Enterprise Bank Ltd to Heritage Bank Plc.
Investigation revealed that the bank has been grappling with several issues which were seen as normal but these took alarming status about five years ago.
In the last five years and under its first chief executive, Dr. Iffie Sekibo, the bank has been struggling to keep afloat and has failed stress tests on several occasions.
A top banker and a former executive director in the bank, who prefers anonymity, said the bank has been looking for strategic investors for about five years ago but failed in getting one.
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”.
An investigation by Daily Independent revealed that the bank is one of the few banks that failed the stress test by the Central Bank of Nigeria with an instruction to look for “strategic” investors.
The major issue is that of high indebtedness.
The bank, according to the investigation, has loans or debt obligations to fulfill and this is weighing down its operations.
When our correspondent asked for 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”.