Customers in Panic Withdrawals As Fresh Problems Hit Heritage Bank

Posted by African Examiner Banking & Finance, Business News, Featured, Latest Headlines Saturday, December 3rd, 2016

BALTIMORE, MD (AFRICAN EXAMINER) – Despite many denials of the management, Heritage Bank is still battling with the challenge of insolvency, financial problems, a development that has prompted customers to massively withdraw their money from the Bank.

The financial problem with the Bank as reported recently in the media has also forced First Bank Plc, which is in charge of its universal clearing activities, to issue a threat to blacklist it and stop further clearing transactions on its behalf, if its outstanding deficit of over N5 billion remained.

Heritage Bank, a new money market institution, findings have indicated is embroiled in the current mess, due to lack of financial discipline; failure to stick to due diligence in management style and award of contract; nepotism in recruitment; posting and designating staff into strategic as well as sensitive positions within the Bank, by the top management members.

While the management used huge amount of customers’ deposit to corner patronage and retain certain deposits, including pension funds, it has since been ironically buckled down with dearth of liquidity for its customers’ withdrawal within its banking halls and from the Automated Teller Machine (ATM) across the country.

Following the ongoing economic recession, which has resulted to paucity of cash in circulation and coupled with the previous nasty experience some customers have faced with the commercial Banks in distress, run on the Heritage Bank which started barely over two weeks ago has not abated.

Presently, massive and panicky withdrawal have hit the Bank nationwide. Many of the worried customers said their decision was to avoid falling victims of another distressed bank, as they have lost so much to the many troubled Banks in the past.

A young Lagos based business entrepreneur who is into corporate branding and craved not to be mentioned lamented that she was approached by the Bank staff, some months ago to open a business account. According to her, she succumbed to the pressure of her account officer, and ever since, the account has remained the hub of her financial transactions, as she deposits regularly and clients transfer money often into the account from different parts of the country.

The young graduate regretted that the challenge she faces presently is that she has not been able to make regular withdrawal from her company’s account. She lamented that the situation has been affecting her and the business as she could not access enough funds to execute some of the contracts awarded to her.

The embattled customer said she was frustrated and considering taking a legal action against the Bank, still she expressed reservation on the extent of effect of such move. She painted gloomy pictures of other customers who have either their personal or company monies trapped in the Bank. She added that the aggrieved customers with some consumer right activists, might soon stage a peaceful protest to the Bank Headquarters to express their grievances.

Other indices to confirm that the bank is distressed are that, it has drained its foreign currency domiciliary accounts through sleazy practices by its directors.

Also, there is growing concern by members of the public about the recent bank’s inconsistence in appearance, for various interbank business transactions, among of which are: partaking in Treasury bill business as well as overnight cash bidding for some time now.

Besides, Heritage Bank has also been accused of poor dealings with some corporate organizations. The affected organizations said the Bank has failed to provide the projected returns, obviously due to its lean treasury.

A financial expert who also preferred not to be named responded that the travail facing the young Bank was far from being political, propaganda or calculated blackmail as alleged, confirming that the Bank’s customers were not having it pleasant.

It would be recalled that Heritage Banks’ Divisional Head, Corporate Communications, Mrs. Olusola Longe-Okenimkpe, recently while responding to question relating to run on the troubled financial institution, countered that there was a calculated attempt by some unnamed interest groups to mount negative campaign against the bank.

She fired: “Heritage Bank wishes to categorically refute this false information being circulated about the institution with a misdirected intent to derail and misinform the banking public on its financial state”.

Similarly, the Central Bank of Nigeria (CBN) Acting Head, Corporate Communications, Mr. Isaac Okorafor, in his response, recently to ongoing challenge with the Bank, said the distressed stories on the social media insinuating that Heritage Bank was under ”financial distress and therefore unable to discharge its obligations to its depositors” was malicious.

Still, some of the customers, considered the defence as a cover-up therefore, hence, not convinced, which is the reason some of them till present, struggle to withdraw their deposit to the last kobo.

The anonymous money market operator has therefore on the strength of the present travail of the Bank expressed concern, saying the present situation might wreck the Bank and force its take over by the Asset Management Corporation of Nigeria (AMCON). He also expressed worry about the fate of the customers who daily thronged its branches nationwide in desperate attempt to withdraw their money.

As reported over fortnight ago by the Saharareporters, the Managing Director of the Bank, Mary Akpobomen and other directors have been accused of laundering about N12.8billion the sum belonging to the Bank.

The allegation has however prompted the Economic and Financial Crimes Commission (EFCC) to initiate arrest, investigation and prosecution of the accused. However, other reports have indicated that the Senate President Bukola Saraki, who is a part owner of the Bank has prevailed on the EFCC to hold its investigation on the matter.