Some of Nigeria’s largest banks have been directly affected by a new directive from the Central Bank of Nigeria (CBN) that suspends dividend payouts, executive bonuses, and new foreign investments for lenders still operating under regulatory forbearance.
In a circular issued on June 13, 2025, the apex bank ordered these restrictions to strengthen capital adequacy across the sector and ensure compliance with prudential standards. The move comes as the CBN tightens supervision ahead of its 2026 banking recapitalization deadline.
Major Banks Affected
According to a RENCAP report titled “Nigerian Banks, Cash is King” , top banks impacted by the directive include Zenith Bank, First Bank (FBN Holdings), Access Bank, Fidelity Bank, and FCMB—all of which still have portions of their loan portfolios under regulatory forbearance.
- Zenith Bank leads the list with 23% of its loan book under forbearance.
- First Bank follows with 14%.
- Access Bank has 4% exposure.
- Fidelity Bank and FCMB are also significantly affected.
In contrast, GTCO and Stanbic IBTC have exited the forbearance regime and are therefore exempt from the directive. These two banks are expected to continue dividend payments and performance-related compensation without restriction.
CBN’s Reasoning Behind the Move
Regulatory forbearance allows banks to operate temporarily outside certain prudential norms—especially around loan classifications and provisioning—typically during economic shocks or sector-wide instability. The CBN has now determined that such banks must reinforce their capital buffers and resolve any asset quality concerns before distributing profits or making offshore investments.
The directive specifically prohibits:
- Declaring or paying dividends to shareholders
- Paying bonuses or incentives to board members and executive management
- Making new foreign investments or expansions abroad
The restrictions will remain in place until each affected bank exits forbearance and demonstrates compliance with capital and provisioning requirements, verified by the CBN.
Banks Respond to the Directive
In response to investor concerns, Access Bank and Zenith Bank have issued assurances that they are actively working to exit forbearance in the short to medium term. Executives from both institutions stated they are collaborating with regulators to meet capital adequacy and provisioning thresholds as quickly as possible.
“We remain confident in our ability to meet the requirements for exiting forbearance and restoring normal operations,” said a senior executive at Zenith Bank.
Market Reaction and Industry Commentary
The Nigerian Exchange (NGX) witnessed mild sell-offs in banking stocks following the announcement. Analysts have largely welcomed the CBN’s move as a bold but necessary step to protect the financial system.
Experts at Renaissance Capital and Vetiva Capital noted that the directive may dampen short-term investor expectations but ultimately encourages more disciplined capital management.
However, some stakeholders have expressed concern that the public identification of banks under forbearance could affect investor sentiment and complicate fundraising efforts ahead of recapitalization requirements.
Long-Term Outlook
The CBN has positioned the directive as a temporary supervisory measure to ensure the soundness of the banking sector. As Nigeria navigates global financial headwinds and domestic economic pressures, this policy aims to strengthen resilience, restore confidence, and prepare the industry for future growth.
For Nigeria’s top banks, the message is clear: stabilizing the balance sheet takes precedence over shareholder returns—for now.
