Panic withdrawals at Heritage Bank, despite CBN assurances

Despite assurances from the Central Bank of Nigeria (CBN) on the financial stability Heritage Bank, members of the public, and its customers in particular, have remained worried over the state of the commercial bank.

The bank is alleged to have been undergoing what an insider described as undue pressure from its customers for cash withdrawals in the last one month.

Its crisis started after the rumour mill went to town, via the social media, that its inability to successfully close its books after its acquisition of former Enterprise Bank in 2015 was a sign that all was not well.

Other source of concern for the public was the bank’s irregular appearance in the various interbank business transactions, including participating in treasurer bill business and overnight cash bidding for some time now.

There is also the issue of the bank’s partnership deals with some corporate organizations, which are not yielding the projected returns, because of cash-flow squeeze on most outfits in Nigeria since the recession.

But despite these, the CBN Head, Corporate Communications, Mr. Isaac Okorafor, on Tuesday issued a statement saying: “The attention of the Central Bank of Nigeria (CBN) has been drawn to false and malicious stories on the social media insinuating that Heritage Bank is under financial distress and therefore unable to discharge its obligations to its depositors.

“We wish to state that Heritage Bank is not in distress and as such its depositors should go about their transactions without fear.”

However, this CBN assurance has been seen by industry watchers as a statutory statement, which it also issued for Skye Bank in 2015 only to later grant a bailout fund to it and also mandated AMCON, in August 2016, to absorb the bank’s bad debts, while looking for its buyers.

But to reduce the frequency of cash withdrawal on the bank, Heritage Banks’ Divisional Head, Corporate Communications, Mrs. Olusola Longe-Okenimkpe, stated that there was a calculated attempt by some unnamed interest groups to mountain negative campaign against the bank.

“Heritage Bank wishes to categorically refute this false information being circulated about the institution with a misdirected intent to derail and misinform the banking public on its financial state,” she said.

A source said until the in-fighting in the board room of the bank is resolved, it would continue to suffer the crisis of a bank under tension and yet to be in full control of its expanded estate having inherited former Enterprise Bank as its asset.
By Emma Eke….