First Bank has successfully recovered a N456 billion loan extended to Heritage Bank.
This loan was part of a bailout package arranged during the tenure of former Central Bank of Nigeria (CBN) Governor Godwin Emefiele.
According to reliable sources within First Bank, the CBN credited the tier-one bank before deciding to revoke Heritage Bank’s license. This timely action prevented what could have been a significant impairment charge for First Bank.
On Monday, the Central Bank of Nigeria (CBN) announced the revocation of Heritage Bank’s license, citing the bank’s ongoing struggles and lack of recovery prospects, leading to its collapse.
Verified information from Nairametrics confirms that First Bank received N456 billion, concluding a seven-year wait since it supported Heritage Bank with the loan.
First Bank’s financial statements show 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.
These balances include clearing balances with other deposit money banks, as First Bank provides clearing services for some banks in Nigeria. As of December 31, 2023, these balances included clearing exposures to other banks.
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Efforts to recover the N456 billion loan intensified as Heritage Bank’s financial health deteriorated over the years.
A resolution was reached earlier this year when a new board and management took over the holding company of Heritage Bank.
The amount was credited to First Bank before the official announcement of Heritage Bank’s license revocation, ending the prolonged wait.
This payment is expected to be reflected in FBN Holdings’ half-year financial statements, strengthening its cash positions and preventing a potential loan write-off.
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.
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