Heritage Bank’s collapse was death foretold – Moghalu

A former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, on Wednesday described the recent revocation of the banking license of Heritage Bank Plc as the chronicle of a death foretold.

He added that the development was not surprising and does not mean that the financial system was not sound.

In a series of posts on his X platform, Moghalu, a former presidential aspirant, said the apex bank’s action was to protect depositors’ funds, and maintain confidence in the banking system.

He wrote: “The revocation of the banking license of Heritage Bank by @cenbank is the chronicle of a death foretold. In other words, it’s not surprising.

“I don’t think it should worry anyone, nor does it mean the financial system isn’t sound. Banks are businesses, even if very special and thus heavily regulated ones. A bank that is badly run should not have a lifetime guarantee. The important thing is to protect depositors’ funds.”

READ ALSO: Moghalu backs planned relocation of CBN’s departments to Lagos

To Moghalu, the Asset Management Corporation of Nigeria (AMCON) was established to ensure systemic financial stability and guard against bank failure.

“What we did in 2010 when we created AMCON was to ensure SYSTEMIC financial stability. We made sure no bank failed then to ensure systemic stability because of the unique situation of the global financial crisis.

“But over the long term, I never subscribed to a view that no bank, no matter how badly run, should ever fail. That would be a wrong approach to financial regulation,” he added.