Fortis Microfinance Bank liquidates

The Nigeria Deposit Insurance Corporation (NDIC) has informed the public of the official liquidation of Fortis Microfinance Bank and its branches nationwide, a statement on NDIC official website disclosed.

The official liquidation was announced on February 3, 2019, through the office of the corporation’s Director, Claims Resolution Department. In the press release, NDIC also assured payment to the insured depositors.

“The Nigeria Deposit Insurance Corporation (NDIC), the official Liquidator of Fortis Microfinance Bank whose license was recently revoked, has concluded arrangement to close the bank and its branches and pay the insured Depositors.
“We are therefore calling all depositors of the bank to visit the bank’s branches and meet NDIC officials for the verification of their claims, commencing from Monday, 4th February, 2019 till Friday, 8th February, 2019.”

Recall that Fortis had disclosed in a statement in February 2018, that the company is working with a reputable firm of turnaround experts working in concert with a revitalized Management team to quickly restore the Bank on the path of sustainability and profitability, through the adoption of a revised business model and rejigging of the existing Five-Year Strategic Plan.

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The restructuring news was followed with a notice to the Nigerian Stock Exchange, (NSE), where Fortis Microfinance Bank announced the appointment of an Interim Management Committee by the Central Bank of Nigeria (CBN) to pilot the affairs of the bank.

A litany of controversies

Nigerian Stock Exchange suspended Fortis’ shares of trading due to failure to submit its 2016 audited accounts. The Bank complained that the delay was due to the CBN, which required that banks submit their accounts for prior approval before results are filed at the exchange.

The suspension was lifted, but by then, depositors had enough. There was a panic rush to withdraw funds from the bank, leaving it in dire straights and unable to pay everyone. Just as it was about resolving its issues, the results released by the bank unearthed “accounting anomalies” leading regulators to go investigate prior results.
The bank was also reported to be owing lenders as much as N7.5 billion in on lending facilities and is reportedly facing difficulties meeting the payment obligations. Directors of the bank were also made to relinquish real estate assets worth about N640 million in exchange for shares.

Fortis Overview

Fortis Microfinance Bank was licensed by the Central Bank of Nigeria (CBN) in 2007 and listed on the Nigerian Stock Exchange (NSE) as the first private sector-led Microfinance Bank in 2012, had its shares suspended from being traded on the floor of the NSE for failing to adhere to standard corporate governance and extant post-listing requirements that make it mandatory for quoted companies to submit their financial statements within stipulated timelines.