2,000 Heritage Bank employees out of jobs after surprise license revocation

Heritage Bank staff found out about license revocation like everyone else.

While speculation of a takeover of Heritage Bank had swirled in the financial industry circles for years, its license revocation on June 3 surprised almost everyone.

The announcement, which put an estimated 2,000 employees of the tier 2 bank out of jobs, sent shockwaves through the bank’s open-plan Victoria Island office, according to six employees who spoke to TechCabal.

“Nobody saw this coming. We were not informed at all. But it is well. I believe it is the will of God,” a now unemployed account relationship officer told TechCabal.

Since June 2023, the bank’s liquidity struggles meant it could not process customer withdrawals. It began placing restrictions on customer accounts, said one ex-employee with knowledge of the matter.

While higher-level employees expected an intervention from the regulator, they did not anticipate a liquidation.

“We thought the Central Bank would create a bridge bank to take over the [bank’s administration and try to restore its operations to normalcy],” a highly placed staff told TechCabal.

So when NDIC officials walked into the office on the morning of June 3, many thought it was a regular audit, since the central bank had recently notified the bank of an upcoming Anti-money laundering (AML) audit, according to two ex-employees.

“They instructed us to pack up all our personal belongings and only that, and evacuate the building,” another employee who worked at the Ajose branch told TechCabal. “I think they made the visit impromptu so that no one would move anything valuable from the building before they arrived.”

The bank may have also kept the liquidation under wraps to prevent a bank run before the process kicked in.

Employee salaries were paid into their Heritage Bank accounts, so a few people had a chance to move their funds. The NDIC began processing withdrawals under N5 million on June 6 and Heritage Bank employees are applying for the insured deposit.

It involved filling out a paper form being issued at Heritage Bank branches and at the NDIC offices across the country.

“But some don’t even have transport fare to go and physically fill out the form for reimbursement,” a now-unemployed junior staff told TechCabal.

This abrupt job loss follows protests at the head office against the job cuts happening across its branches since March.

“The bank terminated its contract with an outsourcing firm which managed about 800 contract staff some of whom had worked with the bank for over a decade,” a member of the bank’s domestic union told TechCabal. The job cuts may have been an attempt to reduce operating costs ahead of the liquidation.

The cuts affected mostly drivers and tellers, some of whom were forced to forfeit their pensions. Some full-time staff were demoted or relocated to other branches, according to another Heritage Bank staff. Now with the liquidation of the bank, all 2000 employees are out of jobs.

“We were negotiating better compensation for affected employees before this happened,” Jekwu, the chairman of the domestic union of Heritage Bank told TechCabal. “However, the bank is yet to address the current circumstances.”

However, since the news broke, recruiters and concerned industry colleagues have been advertising vacancy notices in other banks to now unemployed Heritage Bank staff.