Heritage Bank’s eventual collapse in 2024 was long in the making

Key takeaways

  • Heritage Bank emerged from the ashes of Société Générale Bank Nigeria (SGBN), which lost its license in 2006.
  • The bank rebranded and re-entered the market in 2012, later acquiring Enterprise Bank in 2014 to expand its reach.
  • Despite its growth, financial instability and poor loan performance plagued its operations.
  • By 2021, it recorded a staggering 81.2% non-performing loan (NPL) ratio.
  • Regulatory pressures mounted, leading to the revocation of its banking license in June 2024.

Heritage Bank’s story is one of ambition, expansion, and financial distress. Originally operating as Société Générale Bank Nigeria (SGBN), it lost its license in 2006 before rebranding as Heritage Bank in 2012. The bank made a bold move in 2014 by acquiring Enterprise Bank, significantly increasing its footprint in the industry. However, the rapid expansion came with growing financial burdens.

By 2021, cracks in Heritage Bank’s foundation became evident. It posted an ₦82.9 billion loss, largely due to a non-performing loan ratio of over 81%, one of the highest ever recorded in Nigeria. The Central Bank of Nigeria (CBN) closely monitored the situation, and by 2024, it was clear the bank was no longer viable. With its license revoked, Heritage Bank became another cautionary tale of how mismanagement and financial instability could bring down even a once-promising institution.

Source:

CBN, Media reports

Period:

1977-2024
HTML code to embed chart
Want a bespoke report?
Reach out
Click to copy HTML embed code
Tags
Related Insights
Mobile banking fraud cases increased by 87.2% to 146, the highest in 2024
  • Total fraud cases in Kenyan banks rose from 173 in 2023 to 353 in 2024.
  • Mobile banking fraud cases jumped by 87.2% to 146, making it the most common fraud type.
  • Online banking fraud recorded the steepest rise, growing by 457.9% to 106 cases.
  • Identity theft increased by 51.4%, reaching 56 reported cases in 2024.
  • Internet scams increased by 28.6%, totalling 9 cases in 2024.
With 146 cases, mobile banking fraud resulted in the highest loss of KES 810.7B
  • Kenya recorded 353 fraud cases in 2024, totalling KES 1.6T in losses.
  • Mobile banking fraud, with 146 cases, was the biggest threat, causing KES 810.7B in losses.
  • Card fraud had only 24 cases but resulted in KES 263.3B lost, showing its high risk. Computer fraud recorded 12 cases, leading to KES 203.4B in damages.
  • Identity theft saw 56 cases, costing banks and customers KES 199.1B.
  • Online banking fraud was the second most frequent (106 cases), but losses were relatively lower at KES 111.8B.
  • Internet scams had the fewest cases (9) but still caused KES 6.1B in losses.
Titan Trust acquires Union Bank, keeping its name and century-old heritage
  • Union Bank began as Colonial Bank, later Barclays Bank DCO, before indigenisation in 1979.
  • Nigerian investors took majority control, renaming it Union Bank of Nigeria.
  • The 2009 banking crisis weakened the bank; AMCON stabilised it, while Union Global Partners Ltd injected $500m for 65% control.
  • Titan Trust Bank acquired up to 100% ownership, and Union Bank was delisted from the Nigerian Exchange.
  • A court-approved scheme merged Titan Trust into Union Bank; Union Bank survived, retaining its century-old name and legacy under Titan’s ownership.
Access Bank reported the highest total salaries paid among selected Nigerian banks in 2024, reaching ₦357.6B
  • Access Bank paid the highest total salaries in 2024, amounting to ₦357.6 billion.
  • Stanbic IBTC devoted the largest share of its revenue to salaries at 9.96%, despite a much lower total salary bill than Access or FirstHoldCo.
  • Zenith Bank had one of the highest salary bills (₦137.7 billion) but spent the smallest portion of its revenue on staff at just 3.47%.
  • Wema Bank, though paying the lowest in total salaries (₦33.8 billion), had one of the highest salary-to-revenue ratios at 7.81%.
  • FirstHoldCo, with ₦229.1 billion in staff costs, maintained a moderate salary-to-revenue ratio of 7.14%.
  • The gap between total salary spend and salary-to-revenue ratios reveals more about each bank’s internal cost structure.
Access Bank consistently led in gross earnings among selected Nigerian banks, reaching N4.9T in 2024, a significant jump from N2.6T in 2023
  • Access Bank led all Nigerian banks with ₦4.9T in gross earnings in 2024, nearly doubling its 2023 performance.
  • FirstHoldCo saw a sharp rise in earnings to ₦3.2T in 2024
  • Zenith Bank grew consistently, crossing the ₦4T mark in 2024 from ₦1T in 2022, showing strong operational expansion.
  • Wema Bank, despite being the smallest, quadrupled its earnings over two years, from ₦0.1T to ₦0.4T.
  • Fidelity and FCMB nearly tripled their gross earnings between 2022 and 2024, showing rising momentum among mid-tier banks.
Kenya led 40 African countries with 90.1% account ownership in 2024
- Kenya led with 90.1 percent account ownership in 2024. - Mauritius (89.6 percent) and Ghana (81.2 percent) also in top 3. - Nigeria ranked 11th at 63.3 percent; Tanzania fell short at 59.8 percent. - Only 14 African countries exceeded the 60 percent inclusion benchmark. - Another 14 African countries have no recent data in the Global Findex
POPULAR TOPICS
SIGN UP TO OUR NEWSLETTER
Get periodic updates about the African startup space, access to our reports, among others.
Subscribe Here
Subscription Form
A product of Techpoint Africa. All rights reserved