In a decisive move echoing the persistent struggles of Heritage Bank, the Nigerian Deposit Insurance Corporation (NDIC) made a significant stride on Monday morning, orchestrating the takeover of several Heritage Bank branches across strategic locations. TechCabal’s keen eye noted the presence of no less than twelve NDIC officials meticulously canvassing the Victoria Island, Allen Avenue, Ilupeju, and Ladiopo branches of the bank.

A palpable air of intrigue enveloped the proceedings as one of the officials, entrenched in a branch office, brandished a memo denoting a “special assignment.” When probed for elucidation on the matter, the official maintained a stoic silence, declining to offer any commentary or divulge specifics.

Sources privy to the unfolding situation insinuated that the aforementioned “special assignment” intricately intertwines with the exigency of distress resolution and the imminent takeover of Heritage Bank. As per the stipulations enshrined in the Banks and Other Financial Institutions Act (BOFIA), the Central Bank is legally mandated to relinquish control of significantly or critically under-capitalised banks to the deposit insurer for requisite distress resolution measures.

In the wake of these developments, attempts to solicit commentary from a Heritage Bank spokesperson proved futile, with silence resonating from their quarters. However, in stark contradiction, three NDIC officials vehemently refuted any conjecture regarding a takeover, adamantly asserting that the visitation was merely part of a routine regimen ubiquitous across all banking institutions.

Regrettably, a spokesperson for the Central Bank remained elusive, shrouding the episode in further opacity.

The fiscal woes besieging Heritage Bank have been laid bare for five years, with a glaring spotlight illuminating the erosion of its capital foundation. Reports from December 2023 purported that Heritage Bank floundered a stress test, catalyzing the Central Bank’s directive for the institution to seek strategic investors to resuscitate its dwindling capital reservoirs.

According to insiders acquainted with the inner machinations of the bank’s financial labyrinth, Heritage Bank languishes with a staggering negative shareholder equity of ₦900 billion—a stark testament to its ailing fiscal health.

Despite the Central Bank’s April 2024 ultimatum for Heritage Bank to articulate viable recapitalization strategies, the institution languished in a quagmire of inaction, failing to advance negotiations with potential investors, as confirmed by a source intricately involved in these deliberations.

Amidst this stagnation, Heritage Bank embarked on a disheartening trajectory, culminating in the termination of 1,000 employees’ contracts in April 2024, while customers grappled with an arduous ordeal gaining access to their deposits—a predicament initially brought to light by TechCabal in June 2023.

A scathing 2019 report from Proshare underscored the recurring liquidity crises plaguing the bank, painting a grim picture of its persistent solvency woes.

Established in 2012, Heritage Bank’s tumultuous journey encountered its nadir in 2018, precipitated by years of lax corporate governance catalyzing ill-fated loan disbursements. The ill-conceived acquisition of Enterprise Bank for ₦56 billion in 2014 served as a harbinger of misfortune, compounded by an ill-timed expansion strategy reliant on bolstering its retail footprint—a venture that floundered disastrously.

The implementation of the Treasury Single Account in 2015 further exacerbated the bank’s plight, constricting its access to public funds, elevating funding costs, and precipitating a decline in deposits, accentuating the vulnerability of a bank tethered to a diminutive customer base.