Securities dealers say CBN suspension of banks’ dividend causing stock market volatility

The Association of Securities Dealing Houses of Nigeria (ASHON) has expressed concern over the Central Bank of Nigeria’s (CBN’s) recent circular temporarily suspending dividend payments by banks.

“This directive, issued on June 13, 2025, aims to ensure compliance with regulatory forbearance and Single Obligor Limit (SOL) requirements.

“However, ASHON believes the timing of this directive is inopportune, given the ongoing efforts by banks to meet the increased minimum capital requirement which is regulatory-induced,” ASHON said in a statement on Tuesday by its chairman, Sam Onukwue.

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According to ASHON, “the announcement of this price-sensitive information has caused shock and dismay due to its potential impact on shareholders and the stock market”.

“The indefinite suspension may erode investor confidence in the banking sector, potentially triggering a sell-off of bank shares on the Nigeria Exchange Limited (NGX), where the sector dominates daily transactions.

“ASHON suggests that the CBN could have managed this situation more discreetly to avoid speculation and market volatility.

“Unless an alternative solution is found, this directive may hinder banks’ capital-raising efforts, particularly those yet to commence their capital raise before the deadline,”
ASHON said.

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA). Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.