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How Over N400bn First Bank loan nailed Heritage bank
The Central Bank of Nigeria (CBN) has settled the over N400 billion owed to First Bank by the now-defunct Heritage Bank, according to the lender and sources familiar with the matter.
“First Bank had exited the exposure and CBN settled the Bank,” Ismail Omamegbe, the lender’s corporate communications manager, said Tuesday.
Another source confirmed that the CBN has paid off First Bank’s exposure to Heritage, given that its intervention was at the behest of the apex bank under Emefiele.
In 2018, First Bank, serving as the clearing bank for all Heritage Bank cheques, noticed an alarming discrepancy.
Of the cheques cleared for Heritage Bank, a substantial N200 billion remained unpaid. This revelation sent ripples of concern through First Bank’s boardroom.
The gravity of the situation was clear: allowing this debt to persist unaddressed posed a significant risk to the bank’s financial stability. However, the potential fallout from pulling the plug on Heritage Bank was equally daunting.
Godwin Emefiele, then Governor of the Central Bank of Nigeria (CBN), stepped in amid the brewing crisis, with a bold proposition.
The emperor, as he was called in banking circles, offered a central bank guarantee on behalf of Heritage Bank, ostensibly to be executed in 2019. This move, a lifeline for Heritage Bank, was designed to assuage First Bank’s concerns and provide a safety net, backed by the Central Bank’s authority.
During a pivotal board meeting, First Bank’s directors were confronted with a distressing notification from their auditors, PricewaterhouseCoopers (PwC).
The auditors revealed that the much-vaunted CBN guarantee was conspicuously absent. This revelation left the board in a state of shock. Questions were immediately directed at then-Managing Director, Adesola Adeduntan, who defended the bank’s position by asserting that Emefiele had given his word regarding the guarantee.
Despite Adeduntan’s reassurances, the absence of a formal guarantee was a glaring oversight that PwC could not overlook.
Compounding the problem, by this time, the debt had ballooned from N200 billion to N300 billion, exacerbating the financial strain on First Bank. The board’s patience was wearing thin, and they issued a stern directive to Adeduntan to secure the guarantee without delay.
The unfolding debacle reached a climax when the board was unceremoniously sacked by Emefiele who had taken offence to the board’s insistence on a formal guarantee.
The CBN on Monday revoked the licence of Heritage Bank Plc with immediate effect following breaches of banking legislation.
The management “have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability,” it said in an emailed statement.
Heritage Bank has struggled with non-performing loans over the years.
An internal document released on Monday revealed that at least 90 percent of the bank’s active loan portfolio of around N700 billion was considered lost or doubtful as of March 31, 2024. The bank’s tier-1 capital comprising equity, reserves, and accumulated earnings was in a deficit of over N1 trillion.
Internal documents showed that less than 5 percent of outstanding loans were performing, with 90 percent classified as lost. Some of those loans date back to 2018 when the bank reported a loan impairment of N37.5 billion in the first half of 2018.
Depositors of the bank that have alternate accounts within the industry will be paid up to the insured amount of N5 million per depositor using their Bank Verification Number (BVN) to locate their alternate account. Depositors with funds over N5 million will be paid liquidation dividends upon realisation of the bank’s assets and recovery of debts owed to the bank.
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Galatasaray technical director opens up on nature of Osimhen’s contract
Galatasaray technical director Okan Buruk has confirmed the presence of a clause in Napoli’s Victor Osimhen loan deal.
Buruk explains that the January clause in Victor Osimhen’s contract allows the player to explore opportunities with various interested clubs during the January transfer window.
This statement came during an interview on the official website of the Turkish champions, where Buruk discussed various topics related to the team.
During the interview, Buruk explained that Osimhen would like to stay at Galatasaray until the end of the season.
He noted that although there is a transfer clause in force, the player has expressed his intention to stay at the club, which he reiterated from the beginning of his arrival.
He stated, “Osimhen wants to stay here until the season is over and he has said this consistently. Although there is a clause regarding January transfers, ultimately it is the player’s decision and he feels committed to staying.”
Reflecting on how the club secured Osimhen’s services, Buruk shared: “I traveled to Milan when I had the chance. Because I lived there for three years, I feel comfortable there. We didn’t talk about football during my visit; instead, we enjoyed dinner together for two days, which helped foster a good relationship. After a match against Adana Demirspor, we had a video call at the airport to discuss the options, and after careful consultation with our transfer committee and the president, we completed the transfer.”
Osimhen joined Galatasaray on the final day of the summer transfer window after negotiations with Chelsea and Al Ahly failed to materialize. He quickly adapted to his new surroundings and made significant contributions with eight goals and four assists in just nine appearances in all competitions.
Eaglespath
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Ondo: Gov Aiyedatiwa says he’s not aware of vote buying on his behalf
Ondo State Governor Lucky Aiyedatiwa has stated that he was not aware that his political associates bought votes on his behalf.
This is coming a few hours after he emerged victorious in all the 18 local government areas of the state.
According to report, the incumbent governor and candidate of the All Progressives Congress, APC, was accused of vote-buying after his victory in the November 16 election.
However, speaking in an interview with Channel TV on Sunday night, the governor noted that the oppositions are using the vote-buying allegation as an excuse for their loss.
“I’m not aware of such. The opposition will want to say that to make excuses for their failure, but for us, it is what we worked for; the people have spoken through their votes.
” There won’t be any reason to buy votes because Ondo people know what they want. I’m not aware of people buying votes on my behalf.”
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Uncovered! World Bank exposes $32m missing funds in Nigeria’s water project
In Nigeria’s water project, the World Bank has discovered $32 million in undeclared payments.
The banks recently released their FY2024 Sanctions System Annual Report, which included this information.
According to the study, the lost monies were meant to improve Nigeria’s water infrastructure but were not properly accounted for, which led to an intervention to protect the project’s integrity.
“INT followed up on risks identified regarding a project in Nigeria’s water sector and flagged to operations the risk, which was associated with $32 million of unaccounted funds.”
The World Bank worked with the project team, which included the operations manager, financial management expert, and task team leader for Nigeria, in an effort to retrieve the money.
While $6 million is still in the project account to cover expected operating costs, the Central Bank of Nigeria has requested reimbursement of $22 million.
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