ABUJA- JUNE 14, 2025.
In a bold move to strengthen Nigeria’s banking sector, the Central Bank of Nigeria (CBN) has directed all banks under regulatory forbearance to temporarily suspend dividend and bonus payments to their foreign subsidiaries and ventures.
This was announced in a circular released on Friday and signed by the CBN Director of Banking Supervision, Olubukola Akinwunmi.
🚨 What This Means
The CBN’s latest directive is part of a broader strategy aimed at:
âś… Reinforcing capital buffers
âś… Improving balance sheet resilience
âś… Ensuring prudent capital retention within Nigerian banks
“This temporary suspension is until such a time as the regulatory forbearance is fully exited and the banks’ capital adequacy and provisioning levels are independently verified to be fully compliant with prevailing standards,” the circular stated.
đź’ˇ Why It Matters
This measure comes amid the ongoing recapitalization push initiated by the CBN, which requires Nigerian banks to shore up their capital base by 2026.
The directive is meant to prioritize financial health and compliance over profit distribution, ensuring that banks have enough internal capital to meet current and future obligations.
đź•’ Background Context
April 2022: CBN extended interest rate forbearance on loans for 12 months
September 2023: CBN barred banks from using FX revaluation gains for dividends or major capital expenditures
2024–2025: Regulatory scrutiny heightened as banks race to meet new recapitalization targets
🧾 What Is Regulatory Forbearance?
Regulatory forbearance refers to temporary relief given by the CBN to banks that may not currently meet certain regulatory requirements (like capital adequacy), allowing them time to correct their financial posture without being penalized.
This means the affected banks are under watch and need to retain all available resources.
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🔎 What’s Next?
đź“Ś Banks are expected to focus on recapitalization and internal strengthening
đź“Ś Foreign stakeholders in Nigerian banks may see reduced earnings
đź“Ś Investors and analysts will closely monitor bank compliance reports
✍ Final Word
This decision reflects the CBN’s cautious and protective stance toward Nigeria’s financial system, especially in light of recent economic headwinds and foreign exchange volatility.
It sends a clear message: stability first, profit later.
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