It has been verify that First Bank has been fully reimbursed for a “N456 billion loan” that was given to Heritage Bank.
This recovery is a component of a “bailout loan” that was arranged under the governorship of Godwin Emefiele, the previous governor of the Central Bank of Nigeria (CBN).
First Bank insiders claim that the CBN credited the tier-one bank before deciding to remove Heritage Bank’s license, saving First Bank from potentially suffering a hefty impairment penalty.
On Monday, the CBN announced the revocation of Heritage Bank’s license, stating that “the bank has continued to suffer and has no reasonable prospects of recovery,” which led to the bank’s eventual collapse.
Read Also: Heritage Bank’s Collapse: CBN Debunks Planning To Withdraw Licenses Of Three Banks
Verified information from THE MATRIX indicates that the actual amount received by First Bank was N456 billion, concluding a seven-year wait since First Bank supported Heritage Bank in clearing.
First Bank’s financial statements reveal that the bank held balances with other banks amounting to N688 billion as of the first quarter ending March 2024, down from N735 billion in December 2023.
According to First Bank, these balances include clearing balances with other deposit money banks. First Bank provides clearing services for some banks in Nigeria, and the current balances within Nigeria include clearing exposures to banks as of December 31, 2023.
Push for Recovery: Efforts to recover the N456 billion loan intensified as Heritage Bank’s situation worsened over the years. However, a resolution was not reached until a new board and management took over the holding company of the bank earlier this year.
Read Also: Heritage Bank Collapse: Peter Obi Calls For Prompt Payment Of Depositors’ Funds
The amount was eventually credited to First Bank ahead of the official announcement of Heritage Bank’s license revocation, ending the seven-year wait.
This payment is expected to be reflected in FBN Holdings’ half-year financial statements, bolstering its cash positions and preventing the bank from incurring a write-off for the loans.
FBN Holdings reported a pre-tax profit of N358.8 billion in the first quarter of 2024, alongside an impairment provision of N227.4 billion.
Auditors had often requested a provision for the loan, but this request was repeatedly dropped due to the CBN’s letter guaranteeing loan repayment.
Read Also: Heritage Bank’s Collapse: Here Is What’s Next
This successful loan recovery is a significant financial maneuver for First Bank, reflecting strategic financial management and timely intervention by regulatory authorities to maintain stability within Nigeria’s banking sector.
According to information contained in the 2021 audited financial statement of the bank at a negative reserve of N230.8 billion as of December 2021. The bank had a share capital of just N53.9 billion and accumulated losses of N459.3 billion making it technically insolvent.
As of 2021, Heritage Bank reported it had a balance of N247 billon as balances due to banks in Nigeria. The bank also cited First Bank as the only bank owed the amount at the time. It is likely that the N456 billion paid to First Bank includes accumulated interests.
Heritage Bank is yet to make public its 2022 and 2023 financial statements.
