The Central Bank of Nigeria (CBN) has announced heightened supervisory measures on a select number of commercial banks currently operating under regulatory forbearance, as part of its broader strategy to stabilize the financial sector and implement the ongoing recapitalization programme.
In a press statement issued on Tuesday by the Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, the apex bank confirmed that these banks remain under close monitoring.
The institutions, which continue to benefit from temporary regulatory support stemming from the aftermath of the COVID-19 pandemic, are now subject to specific time-bound restrictions.
“These include temporary restrictions on capital distributions, such as dividends and bonuses, to support the retention of internally generated funds and bolster capital adequacy,” the statement read.
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“All affected banks have been formally notified and remain under close supervisory engagement.”
The CBN emphasized that the recapitalization drive, which was introduced in 2023, is aligned with Nigeria’s long-term economic vision. It has already begun yielding positive outcomes, including increased capital inflows and improvements in banks’ balance sheet strength.
According to the apex bank, the measures aim to improve the resilience of the affected institutions, many of which have been granted flexibility within the capital framework to ensure a smooth transition.
It also reiterated that Nigeria’s regulatory standards, including capital adequacy thresholds, are more stringent than the global Basel III minimums—underscoring its commitment to maintaining a robust and well-regulated financial system.
“These adjustments reflect a well-established supervisory process consistent with global norms,” the statement added. “Regulators in the U.S., Europe, and other major markets have implemented similar transitional measures as part of post-crisis reform efforts.”
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In a related move, the CBN has issued a directive suspending dividend payments, executive bonuses, and investments in foreign subsidiaries or offshore ventures by banks currently under forbearance. This, the regulator noted, is essential for reinforcing capital buffers, enhancing balance sheet resilience, and encouraging prudent financial management within the sector.
The directive specifically targets banks that are under regulatory leniency due to breaches in credit exposure and the Single Obligor Limit (SOL)—conditions that point to underlying stress in their financial positions.
A recent research note by Renaissance Capital provided further insight into the banks most exposed to forbearance-linked loans.
According to the report: Zenith Bank holds forbearance loans equivalent to 23% of its gross loan portfolio; FirstBank follows with 14%,; Access Bank has 4%,
Fidelity Bank and FCMB—two Tier II lenders—are exposed at 10% and 8%, respectively.
In contrast, GTCO and Stanbic IBTC have zero exposure to such loans, having proactively written off or provisioned against them as of December 2024.
The data was derived from recent management engagements, including a December 2024 briefing with Zenith Bank and quarterly updates from other institutions.
Despite these challenges, the CBN reassured stakeholders that Nigeria’s banking system remains fundamentally sound. It stressed that the current measures are neither punitive nor indicative of systemic risk, but are instead part of a deliberate and phased reform process.
“The banking sector remains strong. These measures are not a cause for alarm but represent a continuation of the orderly implementation of reforms already in motion,” the CBN concluded.
The apex bank also reaffirmed its commitment to transparency and ongoing engagement with key stakeholders, including the Bankers’ Committee and the Body of Bank CEOs, as it navigates the evolving regulatory landscape.