Full List: Breakdown of Funds Access, UBA, GTB, Others Need To Meet CBN’s New Minimum Capital Base

Full List: Breakdown of Funds Access, UBA, GTB, Others Need To Meet CBN’s New Minimum Capital Base

  • The Central Bank of Nigeria recently announced changes in minimum capital requirements for all financial institutions
  • This includes Commercial, merchant, and non-Interest Banks in Nigeria, with the highest capital requirement set at N500 billion
  • Experts who spoke to Legit.ng believe that many banks are at risk of losing their current status unless they are able to raise funds in two ways

The Central Bank of Nigeria recently announced new minimum capital requirements for banks, including commercial, merchant and non-interest banks.

In a statement signed by CBN's Acting Director of Corporate Communications Department, Sidi Ali, the minimum capital base for commercial banks with international authorisation is N500 billion.

CBN sets minimum requirements for banks
Nigerian banks are expected to raise funds to meet CBN's new capital requirements Photo credit: Access bank
Source: Facebook

Banks with national authorisation are now N200 billion, and the new requirement for those with regional authorisation is N50 billion.

Ali also disclosed that the new minimum capital for merchant banks would be N50 billion, while the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion, respectively., Punch reports.

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What is a capital base?

Capital base is a term used by individual investors, publicly traded companies, and banks to refer to a base level of funding.

CBN sets deadline

In another CBN circular signed by the Director Financial Policy and Regulation Department, Haruna Mustafa, the apex bank instructed that all banks are required to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026.

Based on financial statements, here is how each Nigerian bank's capital base stands

Banks that need N500bn

  • Ecobank - N353.513
  • Zenith Bank - N270.745
  • Access Bank - N251.811
  • First Bank - N251.340
  • Union Bank - N148.090
  • GTBank - N138.187
  • FCMB - N125.294
  • UBA Bank - N115.815
  • Fidelity Bank - N115.753
  • Citibank - N14.438

Banks that need N200bn

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  • Stanbic IBTC - N109.349
  • Sterling Bank - N57.154
  • Polaris Bank - N50.433
  • Unity Bank - N31.872
  • Globus Bank - N25.064
  • Providus Bank - N16.331
  • Wema Bank - N15.177
  • SunTrust Bank - N11.839

Expert speaks

Reacting to the bank's new capital requirements and shortfall, financial analyst Kunle Afolabi explained that it is likely some banks will downgrade their license to meet the CBN's requirements while others will use rights issues to raise funds.

He said:

"The obvious move for banks in question is to provide their current shareholders with the opportunity to purchase additional shares at a discounted rate which is called right issues.
"However, some banks may opt for an alternative approach, such as a bonus issue. This involves issuing additional share capital to increase their paid-up or paid-in capital, rather than conducting a rights issue.
"Furthermore, there is the potential for certain banks to pursue both options, implementing both a rights issue and a bonus issue as Plan A and Plan B respectively"

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CBN begins debiting loan defaulters' accounts

Earlier, Legit.ng reported that the CBN had begun debiting defaulters' accounts under its development finance intervention programmes.

The CBN's development finance director, Yusuf Yila, stated this on Wednesday, September 28, 2023, after the Monetary Policy Committee (MPC) meeting in Abuja.

Yila said the apex bank has begun debiting its defaulters' accounts, specifically states and farmers who benefitted from its interventions.

Source: Legit.ng

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