CBN Announces New Minimum Capital Requirements for Banks in Nigeria
Days after urging Nigerian banks to hasten the recapitalisation of their equity base, the Central Bank of Nigeria (CBN) announced new minimum capital requirements for banks on Thursday, March 28, 2024. The minimum capital base for commercial banks with international authorisation is N500bn.
Confirming this in Abuja on Thursday, March 28, 2024, the Acting Director, Corporate Communications Department, Mrs. Hakama Sidi Ali, said the new minimum capital base for commercial banks with national authorisation would be N200bn, while the new requirement for those with regional authorization is N50bn.
Mrs. Sidi Ali also disclosed that the new minimum capital for merchant banks would be N50 bn, while the new requirements for non-interest banks with national and regional authorisations are N20 bn and N10 bn, respectively.
A circular signed by the Director for Financial Policy and Regulation, Mr. Haruna Mustafa, to all commercial, merchant, and non-interest banks and promoters of proposed banks emphasized that all banks are required to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026
According to the circular, the move, initially disclosed by the CBN Governor, Olayemi Cardoso, in his address to the Annual Bankers’ Dinner in November 2023, was to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.
To enable them to meet the minimum capital requirements, the CBN urged banks to consider injecting fresh equity capital through private placements, rights issues and/or offers for subscriptions, Mergers and Acquisitions (M&As), and/or upgrades or downgrade of license authorisation.
Furthermore, the circular disclosed that the minimum capital shall comprise paid-up capital and share premium only. It stressed that the new capital requirement is not based on the Shareholders’ Fund.
“Additional Tier 1 (AT1) Capital shall not be eligible for meeting the new requirement. Notwithstanding the capital increase, banks must comply with the minimum capital adequacy ratio (CAR) requirement applicable to their license authorisation.
“In line with extant regulations, banks that breach the CAR requirement shall be required to inject fresh capital to regularise their position,” it added.
The CBN circular said the minimum capital requirement for proposed banks shall be paid-up capital, adding that the new minimum capital requirement shall apply to all new applications for banking licenses submitted after April 1, 2024.
It noted that the CBN would continue to process all pending applications for banking licenses for which a capital deposit and/or an Approval-in-Principle (AIP) had been granted. However, it said that the promoters of such proposed banks would make up the difference between the capital deposited with the CBN and the new capital requirement no later than March 31, 2026.
Meanwhile, the CBN said all banks must submit an implementation plan (clearly indicating the chosen option(s) for meeting the new capital requirement and various activities involved with their timelines) no later than April 30, 2024. The CBN also disclosed that it would monitor and ensure compliance with the new requirements within the specified terms.
Banks & Share Capitals
Eco – 353.513b
Zenith – 270.745b
Access -251.811b
First – 251.340b
GTB -138.187b
FCMB- 125..294b
UBA -115.815b
Fidelity -115.753b
Stanbic- 109.349b
Sterling -57.154b
Polaris -50.433b
Unity -31.872b
Globus -25.064b
Providus-16.351b
WeMA – 15.177b
Citi -14.438 b
Suntrust -11.839b
Source 2022 financial.
