First Bank has received the full repayment of 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, according to Nairametrics.
According to top sources from First Bank, the CBN credited the tier-one bank before it revoked Heritage Bank’s license, thus averting what could have been a significant impairment charge for First Bank.
The CBN declared on Monday that Heritage firm’s license had been revoked, citing the firm’s eventual collapse as “the bank has continued to suffer and has no reasonable prospects of recovery.”
Verified data shows that First Bank received N456 billion, concluding a seven-year period during which First Bank helped Heritage Bank clear
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.
First Bank claims that clearing balances with other deposit money institutions are included in these balances. Certain banks in Nigeria get clearing services from First Bank, and as of December 31, 2023, clearing exposures to banks are included in the current balances within Nigeria.
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.
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 anticipated to strengthen FBN Holdings’ cash holdings and keep the bank from having to write down the loans in its half-year financial statements.
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.
