Days after the Central Bank of Nigeria (CBN) stunned financial markets with sweeping restrictions on banks under regulatory forbearance, only two of the six affected lenders have addressed the market, leaving investors anxious and analysts searching for clarity as stocks continue to tumble.
On Friday, the CBN ordered banks with significant risky loans under its forbearance window to suspend dividends, bonuses, and other capital distributions until those exposures are resolved. The move followed months of regulatory pressure on banks to clean up their books after years of regulatory flexibility, especially during the COVID-19 pandemic.
Regulatory forbearance was introduced as a support programme during the pandemic, allowing banks to delay recognizing certain loans as bad, shielding profits at the time. Much of those risky loans, analysts say, were tied to Nigeria’s volatile oil and gas sector.
According to Renaissance Capital, the banks most exposed to forbearance are Access Holdings, First Bank Holdings, FCMB, UBA, and Zenith Bank.
Since the announcement, Nigerian bank stocks have been hit hard, leading declines on the Nigerian Exchange on Monday and Tuesday. Some shares fell by more than 5% before moderating later in the sessions.
Despite the market turmoil, only FCMB Group and Zenith Bank have spoken publicly about their exposure and plans.
FCMB broke the silence on Monday, revealing it had ₦207.6 billion in loans under forbearance as of May 2025, down from over ₦500 billion last year. These loans are linked to three entities and two major borrowers and are currently classified as Stage 2 – meaning at risk, but not yet confirmed bad debts.
FCMB also disclosed it breached the CBN’s Single Obligor Limit (SOL) with one additional borrower but said it expects to resolve that by September through a loan-to-equity conversion and capital injection. The bank assured shareholders of its ability to sustain dividend payments, barring unexpected shocks.
Zenith Bank followed on Tuesday, saying it has successfully raised and surpassed the N500 billion new regulatory capital for banks of its size. It said its exposure under SOL forbearance related to only a single obligor.
“We are confident that this exposure will be brought within the applicable regulatory limit on or before 30 June 2025.
The bank said forbearance granted on other facilities relates to two customers, it said. It said it has made provisions to cover this and will has taken steps to make full provisions by June 30.
“The Bank expects to have exited all CBN forbearance arrangements by the first half of 2025,” it said.
Both banks said they were confident of being able to pay dividend to their shareholders this year.
No reaction yet
That leaves four banks—Access, First Bank Holdings, UBA, and one other—yet to comment on their individual situations or plans to comply.
“The hush is telling,” one analyst said. “Either they’re deep in spreadsheets or the silence suggests something more troubling. Either way, the market hates two things: bad news and no news. Right now, we’ve got both.”
The CBN on its part has defended the policy, saying there is no cause for alarm. In a statement on Tuesday, it said the Nigerian banking sector remains sound and that the measures are part of broader efforts to strengthen the financial system and prepare banks for the recapitalization program announced in 2023.
“These restrictions apply only to a limited number of banks and are temporary, aimed at ensuring sufficient internal funds are retained to support capital adequacy,” the apex bank said.
The regulator emphasized that Nigerian banks remain on track to meet the new capital requirements before the March 2026 deadline, adding that the approach aligns with practices seen in the U.S., Europe, and other major markets.
“The CBN will continue close engagement with stakeholders to ensure a transparent, predictable, and collaborative regulatory environment,” it said.
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