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First Bank recovers N456 Billion loan from Heritage Bank before license revocation

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First Bank recovers N456 Billion loan from Heritage Bank before license revocation

According to reports, First Bank has received the full repayment of a “N456 billion loan” extended to Heritage Bank.

This recovery is part of a “bailout loan” arranged during the tenure of former Central Bank of Nigeria (CBN) Governor Godwin Emefiele.

According to top sources from First Bank, the CBN credited the tier-one bank prior to its decision to revoke Heritage Bank’s license, thus averting what could have been a significant impairment charge for First Bank.

On Monday, the CBN announced the revocation of Heritage Bank’s license, stating that “the bank has continued to suffer and has no reasonable prospects of recovery,” which led to the bank’s eventual collapse.

Details of the Payment

Verified information from newsmen indicates that the actual amount received by First Bank was N456 billion, concluding a seven-year wait since First Bank supported Heritage Bank in clearing.

First Bank’s financial statements reveal 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.

According to First Bank, these balances include clearing balances with other deposit money banks. First Bank provides clearing services for some banks in Nigeria, and the current balances within Nigeria include clearing exposures to banks as of December 31, 2023.

Push for Recovery: Efforts to recover the N456 billion loan intensified as Heritage Bank’s situation worsened over the years. However, a resolution was not reached until a new board and management took over the holding company of the bank earlier this year.

The amount was eventually credited to First Bank ahead of the official announcement of Heritage Bank’s license revocation, ending the seven-year wait.

This payment is expected to be reflected in FBN Holdings’ half-year financial statements, bolstering its cash positions and preventing the bank from incurring a write-off for the loans.

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.

Heritage Bank’s troubles began in 2019 when it faced severe distress and appeared on the verge of collapse. However, under Godwin Emefiele, the CBN pursued a policy of not allowing banks to fail, supporting Heritage Bank through various measures.

First Bank was given the green light by the CBN to backstop Heritage Bank’s clearing obligations.

Clearing in Nigerian banks refers to the process of settling financial transactions between banks, ensuring the correct transfer of funds from one account to another.

This process is vital for maintaining the banking system’s integrity and efficiency, involving several steps and mechanisms to facilitate the smooth exchange of financial instruments such as checks and electronic funds transfers.

Banks excluded from the clearing process are technically insolvent, indicating distress and preventing further exposure by other banks.

However, under Emefiele’s policy, the CBN supported Heritage Bank through First Bank, issuing a “Letter of Comfort” to the tier-one bank. This guarantee ensured that First Bank did not have to make significant provisions for the loan.

Auditors had often requested a provision for the loan, but this request was repeatedly dropped due to the CBN’s letter guaranteeing loan repayment.

This successful loan recovery is a significant financial maneuver for First Bank, reflecting strategic financial management and timely intervention by regulatory authorities to maintain stability within Nigeria’s banking sector.

According to information contained in the 2021 audited financial statement of the bank at a negative reserve of N230.8 billion as of December 2021. The bank had a share capital of just N53.9 billion and accumulated losses of N459.3 billion making it technically insolvent.

As of 2021, Heritage Bank reported it had a balance of N247 billon as balances due to banks in Nigeria. The bank also cited First Bank as the only bank owed the amount at the time. It is likely that the N456 billion paid to First Bank includes accumulated interests.

Heritage Bank is yet to make public its 2022 and 2023 financial statements.

Business

Blackout looms as explosion hits Zungeru Hydro Electricity Dam

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The multimillion Naira Zungeru Hydro Electricity Dam in Niger state has been hit by an explosion.

The Dam which is yet to be officially commissioned by the Federal government is the fourth located in the state coming after Jebba, Kainji and Shiroro.

Our Correspondent reliably gathered that the explosion occurred early morning of today.
The real cause of the explosion is yet unknown.

A dependable source from the area who confirmed the incident to our Correspondent however said that several of the workers on duty sustained various degrees of injuries and are being attended to at different hospitals close by while those seriously affected are said to have been rushed to Minna, the state capital for more medical attention.

“We saw a foreigner,(Chinese) who is a worker who had severe injuries being ferried to Minna for further medical attention but we cannot say the exact number of staff injured but they are many,” the source added.

Besides the human injuries, the explosion was said to have affected some installations at the Dam.

The implication of the explosion on power supply generally across the country is not yet known.

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Toyota to launch three electric vehicles in Nigeria

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Toyota Nigeria Limited has announced plans to roll out three electric vehicles in the country in the next three years as part of its support for the government’s green deal initiative.

Managing Director of TNL, Mr. Kunle Ade-Ojo, disclosed this on Friday while speaking with journalists at the maiden edition of the Toyota Motor Show organised by the TNL.

He gave the Toyota hybrid electric vehicles coming to Nigeria soon as the Toyota Cross, RAV4 and Land Cruiser Prado.

Ade-Ojo said, “By the end of this year, we’ll be introducing our first hybrid electric vehicle, Toyota Cross. Next year, we’ll introduce the RAV4 hybrid. And late next year or early 2026, we would be bringing in the Land Cruiser Prado hybrid,” he stated.

He also said TNL would be lending its big network of workshops to support the Federal Government’s campaign for the use of Compressed Natural Gas-powered vehicles through conversion.

“We are almost concluding arrangements with different partners to use our network of workshops for vehicle conversion to CNG-powered,” he said.

The TNL MD recalled that Nigeria sold about 10,000 new vehicles last year, with Toyota recording about 1,500 units.

He said that about 15,000 new vehicles were projected to be sold in Nigeria this year, adding that Toyota was on course to double its last year’s performance.

The exclusive motor show came with a number of activities such as a vehicle display, two new Toyota product launches, special after-sale packages, test drives, and, engaging interactions.

The three-day event (June 27-29) was held in Lekki, under a setting and ambiance akin to international auto fairs in Europe and America.

The cozy roomy space also accommodated the Body and Paint Section, the Spare Parts cubicle and the Service area.

Outside the hall but within the event centre fully decorated for the Toyota show was an international test-drive arena for customers willing to have a feel of any of the cars.

Apart from the TNL MD Ade-Ojo, other executives of TNL were on the ground giving details of each of the vehicles displayed as well as after-sales advisory.

Ade-Ojo personally took corporate customers including top government officials, influential chief executive officers of major companies on a tour of the different sections.

Speaking with journalists earlier, he said, “This show is for all Toyota customers and other Nigerians interested in buying Toyota vehicles.

“While we’re still participating in other shows, this solo Toyota Motor Show will enable us to concentrate on our customers’ needs, giving them a view of our range of vehicles and letting them to know other things we can do for them in terms of after-sale service, spare parts availability and body and paint as well as other value-adding services.”

The show, he said, afforded the TNL team an opportunity to “have one-on-one interaction with our customers without any distraction; free diagnosis on customers’ vehicles and a test drive, all taking place in a quiet and comfortable environment.”

Ade-Ojo who also had a parley with the CEOs expressed satisfaction with the attendance and the outcome of the event.

He said, “It was a wonderful outing. Everybody enjoyed the ability to come and have a one-on-one interaction with our team.

“The after-sale area is one sector that has been of major interest to customers who have been coming. The free diagnosis has been well received.” The two models unveiled at the show are Belta and Rumion.

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NNPC Foundation invites corps members to pitch business ideas (Apply Here)

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The Nigerian National Petroleum Company (NNPC) Foundation has invited National Youth Service Corps (NYSC) members to apply for its flagship pitching programme.

Announcing the programme on Sunday in a video shared by NNPC Limited on X, the foundation said current corps members are welcome to pitch business ideas to the organisation.

The programme is themed ‘Innovate NYSC: Pitching for Progress’.

“We are empowering Nigerian youth corps members to become the entrepreneurs of tomorrow. Enter the pitch phase of our entrepreneurial flagship programme and present your ideas to top business experts,” the company said.

“Impress the jury and you will receive a start-up pack to launch your business.

“Plus, we have teamed with Corporate Affairs Commission (CAC) to cut business registration fees by half. It will be your time to shine and bring your innovative ideas to life.”

NNPC Foundation said it is dedicated to fuelling the future of Nigeria by creating job opportunities for young visionaries.

“Visit nfpitchportal.nnpcgroup.com to submit your video pitch on or before July 01, 2024,” the NNPC Foundation said.

“For further clarifications, please send an email to nfpitchingphase@nnpcgroup.com.”

The deadline for submitting pitches, the foundation said, is July 1.

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Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others

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