The Central Bank of Nigeria (CBN) has imposed temporary restrictions on capital distributions, including dividends and bonuses, on Zenith Bank, other banks under its regulatory forbearance to support the retention of their internally generated funds and enhance their capital adequacy.
The temporary restrictions and other measures announced by the apex bank are additional regulatory measures for a small group of banks still transitioning from the support frameworks implemented during the COVID-19 pandemic.
The measures, according to the bank, are part of the broader recapitalisation programme initiated in 2023 to strengthen the financial system and bolster Nigeria’s long-term economic resilience.
This development, according to a statement issued Tuesday night by the Acting Director of Corporate Communications, Hakama Sidi Ali, has been conveyed to the affected banks to safeguard their financial stability and promote a robust and sustainable banking ecosystem.
It would be recalled that the CBN in a June 13th circular suspended seven banks from paying dividends, executive bonuses and foreign investments due to the regulatory forbearance programme which they currently operate under and which the apex bank plans to phase out gradually.
Operating under regulatory forbearance means the CBN is temporarily allowing them to operate despite not fully meeting capital adequacy standards.
Ali, in the statement, however, noted that while most banks are already making substantial progress toward meeting the new capital requirements ahead of the March 31, 2026, deadline, the temporary restrictions on capital distributions, such as dividends and executive bonuses, which apply only to a limited number of institutions, are to help affected banks boost capital retention and enhance their capital adequacy ratios.
“To facilitate a smooth transition, the CBN is providing limited, time-bound flexibility within the capital framework, aligning with international best practices. Nigeria’s risk-based capital standards already surpass the minimum benchmarks outlined in the Basel III global framework, further underscoring the CBN’s commitment to financial system resilience”.
The CBN also cited financial regulators in the United States, Europe and other advanced markets which have adopted similar post-crisis transitional arrangements noting that in Nigeria, the central bank is maintaining open lines of communication with stakeholders through established platforms such as the Bankers’ Committee and the Body of Bank CEOs to ensure transparency and cooperation.
While the latest measures affect only a few banks, the CBN assured that the Nigerian banking sector remains fundamentally strong. It described the new steps as part of routine regulatory reform strategies, with no cause for alarm among investors or the public.
An update by Renaissance Capital flagged Zenith Bank, FirstBank, and Access Bank as the most heavily exposed to the Central Bank of Nigeria’s (CBN) regulatory forbearance. The trio, it said, account for the highest proportions of loan books tied to forbearance arrangements—Zenith Bank at 23 per cent, FirstBank at 14 per cent, and Access Bank at 4 per cent, noting these exposures could place them at the centre of compliance challenges under the CBN’s latest directive.
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