Heritage Bank Faces Imminent Collapse

Heritage Bank Faces Imminent Collapse

It looks as if Nigerian commercial bank – Heritage Bank aren’t out of the woods yet, amidst recent financial struggles.

Fresh reports have seen the light of day and this indicates the following as some of the clangers made by the bank in recent years;

– Acquisition of Enterprise Bank was a major strategic error

– The bank’s non performing loans (NPLs) are amongst the worst in the Industry.

– Impairment charges in H1 2018 was N37.5bn but by Year-end the figure had settled to N634.5m

– The bank posted an operating loss before tax of N38.5bn in H1 2018 and a loss of N4.4bn in the unaudited figures for December 2018;

– The banks debt to equity ratio was -0.17. The negative value reflected negative shareholders fund which could be impaired by as much as $1bn;

– Equity capital has been virtually wiped out by accumulated losses

– Liquidity challenges with The bank’s regular recourse to the CBN’s short term borrowing window

– Corporate Governance: Directors involved in insider loan transactions

– 2018 unaudited figures doesn’t look good

– The bank has not been engaged in direct cheque clearing for a while, HBL’s instruments have been cleared through a third party first tier bank which got a full guarantee from the CBN against clearing loses.

Link to view some of the other mishaps befalling the bank;

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