Fidelity, Zenith, Access Others Need Additional N4 Trillion Capital to Meet New CBN Requirement

• The Nigerian banking sector is currently under pressure to raise new capital to strengthen the sector
• This is to comply with the new Central Bank of Nigeria's capitalisation criteria for banks
• They would need to fund at least N2.2 trillion to meet the new capitalisation standards

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The pressure to raise capital to meet the Central Bank of Nigeria's capitalisation requirements is currently on the Nigerian banking industry, as the current capital shortfall has reached N4 trillion.

New minimum capital requirements for banks were announced by the Central Bank of Nigeria in March 2024. The minimum capital base for commercial banks with international authorisation is N500 billion.

The international banks, which include Access, First Bank, FCMB, GT Co., First Bank, Fidelity, Zenith, and UBA, currently have a combined capital of about N1.3 trillion, according to the Afrinvest "2024 Nigerian Banking Sector Report." To meet the new capitalisation requirements, they would need to raise at least N2.2 trillion.

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Zenith, Access, GTB, others borrow N73.6 trillion as CBN announces changes to funding costs

BusinessDay reported that the audit indicated a N545 billion capital deficit, N200 billion for commercial banks, and N14 billion for non-interest banks within the regional bank group.

Afrinvest Group CEO Ike Chioke said the disparity highlights the difficulty of the weak growth that Nigeria's economy has had over the last 20 years, from 2004 to 2024, when he presented the research in Abuja on Wednesday.

He predicted that bank license downgrading or upgrades and mergers and acquisitions will soon occur in the sector.

Speaking further, Chioke emphasised that for the country to reach its $1 trillion economic aim, all other economic sectors must be forced to expand in tandem with the banking industry.

Nigerian banks likely to meet new capital

Legit.ng reported that following the move by the Central Bank of Nigeria (CBN) on Thursday to establish new capitalisation criteria for different types of Deposit Money Banks (DMBs), analysts and finance experts supported the announcement, stating that it was long overdue.

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Zenith, Access, 3 other banks in race to raise N1.26tn ahead of CBN's recapitalisation deadline

The CBN's recent re-capitalisation directive sets new minimum capital bases of N500 billion for commercial banks with international authorisation, N50 billion for banks with regional status, and N20 billion for non-interest banks with national and regional authorisations, respectively.

In his remarks, as reported in a New Telegraph report, Prof Uche Uwaleke supported the re-capitalisation of banks, calling it a positive step.

Source: Legit.ng