• Wednesday, June 19, 2024
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BusinessDay

Nigerian banks submitting recapitalisation plans, central bank says

Banks’ spend on CSR more than double amid rising poverty

Nigerian lenders have started submitting plans to meet new minimum capital requirements to strengthen the financial system and support economic growth, the central bank said on Tuesday, after setting the standard in March.

Commercial banks with international authorization must have at least 500 billion naira ($344.83 million) in capital under the new rule by the Central Bank of Nigeria. More than 20 lenders in Nigeria need to raise extra capital within two years to meet the new threshold.

“Our banks have begun submitting implementation plans for the banking sector recapitalisation programme in compliance with the CBN Circular reviewing the minimum capital requirements for commercial, merchant, and non-interest banks,” central bank spokesperson Hakama Sidi Ali said in a statement.

“These plans are currently being reviewed by the Bank.”

Three of Nigeria’s top tier lenders, Guaranty Trust Holding Plc, Access Corp and FBN Holdings have announced capital raising plans in recent months.

The central bank has said lenders need extra buffers especially after two large devaluations in the local naira currency since June last year. High inflation and low growth have plagued the economy for a decade and government measures to boost growth have stoked prices, triggered rate hikes and worsened a cost of living crisis.

Labour unions on Tuesday suspended a strike prompted by the failure to agree with the government on a new minimum wage to cushion the impact of its reforms. Unions have said that strike will resume after a week unless a wage agreement is reached.

The central bank, which revoked the licence of unlisted lender Heritage Bank Plc on Monday for breaching its rules, on Tuesday refuted media speculation that it was about to do the same with three other lenders.