Nigeria: NDIC Initiates Auction of Heritage Bank Assets to Settle Uninsured Depositors’ Claims

The Nigeria Deposit Insurance Corporation (NDIC) has begun a nationwide auction of properties and assets belonging to the defunct Heritage Bank, in a move to provide liquidation dividends to uninsured depositors. This step is in line with NDIC’s mandate under section 62 (1)(d) of the recently updated NDIC Act, 2023.

In a statement issued Monday, NDIC’s Director of Communications, Bashir Nuhu, confirmed the start of the auction process following the Central Bank of Nigeria’s (CBN) decision to revoke Heritage Bank’s operating license on June 3. The CBN cited the bank’s inability to meet regulatory requirements and improve its financial position, posing a potential risk to Nigeria’s financial stability.

NDIC, acting as Heritage Bank’s liquidator, will facilitate asset sales across 36 locations nationwide beginning on December 4. The competitive bidding process is open to prospective buyers, including financial institutions, corporations, and individuals. NDIC’s statement emphasized that all participants must adhere to transparent guidelines designed to ensure fair competition and achieve optimal asset recovery values. This recovery is essential for paying out liquidation dividends to qualified claimants.

“The sale of Heritage Bank’s properties will proceed through a competitive bidding process across the bank’s 36 locations starting on Wednesday, December 4, 2024. Interested parties are expected to follow established guidelines to ensure transparency, accountability, and fair competition, allowing us to recover values needed to compensate eligible depositors,” the statement read.

The assets up for sale include both real estate and movable properties, which prospective buyers may inspect before the auction. NDIC is giving preference to financial institutions willing to acquire properties to maintain banking services at these locations, promoting financial inclusion in communities previously served by Heritage Bank. However, corporate bodies and private individuals are also encouraged to participate in the open bidding process.

In line with auction requirements, participants must submit a 10% bid security based on their offered value, payable at designated NDIC offices in key cities, including Abuja, Lagos, Bauchi, Kano, Enugu, and Port Harcourt.

Mr. Nuhu emphasized NDIC’s commitment to transparency and accountability throughout the sale, highlighting the importance of maximizing asset values to provide equitable returns for depositors. NDIC began reimbursing insured depositors—up to N5 million per depositor—within days of the bank’s closure, using Bank Verification Numbers (BVN) to identify alternate accounts.

As of August, NDIC reported that it has reimbursed approximately 82.36% of insured deposits. The remaining 17.64% consists primarily of accounts with post-no-debit (PND) instructions, those lacking BVNs, or accounts without alternative banking arrangements. Depositors with balances above the insured N5 million limit will receive their remaining uninsured funds as liquidation dividends, contingent upon the successful sale of the bank’s assets and the settlement of outstanding obligations.