Nigeria First Bank Successfully Recovers N456 Billion Loan from Heritage Bank Before License Revocation

First Bank of Nigeria successfully recovered a N456 billion loan from Heritage Bank just before the Central Bank of Nigeria revoked Heritage Bank's license. This recovery averted significant financial impairment for First Bank and highlights strategic risk management within the Nigerian banking sector.

In a significant financial maneuver, First Bank of Nigeria recovered a N456 billion loan from Heritage Bank just before the Central Bank of Nigeria (CBN) revoked Heritage Bank's license. This loan, part of a bailout during former CBN Governor Godwin Emefiele's tenure, prevented a substantial impairment charge for First Bank.

The CBN revoked Heritage Bank’s license due to ongoing financial instability and regulatory breaches, marking the end of a prolonged period of distress dating back to 2019. First Bank confirmed that the CBN credited the repayment before the license revocation, ensuring the recovery was secured.

This timely recovery strengthens First Bank’s financial position, reflected in their upcoming half-year financial statements and averting a major financial write-off. The Nigeria Deposit Insurance Corporation (NDIC) has begun liquidating Heritage Bank, ensuring depositors are protected. Meanwhile, the CBN reassures the public of the banking system's stability.

This development highlights the critical role of strategic financial management and regulatory intervention in maintaining stability within Nigeria’s banking sector.

Source: Nairametrics