VANGUARD
The top five banks have a shortfall of N1.5 trillion to meet the new minimum capital base announced yesterday by the Central Bank of Nigeria, CBN for international commercial banks.
In a statement yesterday, the CBN unveiled new minimum capital requirements for banks, raising the minimum capital base for commercial banks with international authorisation by 900 per cent to N500 billion from N50 billion.
Confirming this in Abuja, yesterday in a statement, the Acting Director, Corporate Communications Department, Mrs. Hakama Sidi Ali said the new minimum capital base for commercial banks with national authorisation is now 200 Billion, representing 700 per cent increase from N25 billion.
She also disclosed that the new requirement for commercial banks with regional authorization has been raised to N50 billion, representing 400 per cent increase from N10 billion.
Mrs. Sidi 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.
A circular signed by the Director, Financial Policy and Regulation Department, Mr. Haruna Mustafa, to all commercial, merchant, and non-interest banks and promoters of proposed banks emphasized 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
According to the circular, the move, initially disclosed by the CBN Governor, Olayemi Cardoso, in his address to the Annual Bankers’ Dinner in November 2023, was to enhance banks’ resilience, solvency, and capacity to continue supporting the growth of the Nigerian economy.
To enable them to meet the minimum capital requirements, the CBN urged banks to consider inject fresh equity capital through private placements, rights issues and/or offers for subscription; Mergers and Acquisitions (M&As); and/or upgrade or downgrade of license authorisation.
Furthermore, the circular disclosed that the minimum capital shall comprise paid-up capital and share premium only. It stressed that the new capital requirement shall not be based on the Shareholders’ Fund.
Top banks and capital shortfall
Under the new minimum capital requirement, each of the top five banks namely Access Bank, FirstBank, GTBank, UBA and Zenith Bank must have N500 billion as a minimum capital base.
The CBN however said the minimum capital requirement is limited to paid-up capital and share premium.
Consequently, the five banks are supposed to have combined paid-up capital and share premium of N2.5 trillion.
Vanguard findings, based on the latest financial results of the bank showed that the combined paid-up capital and share premium of the top five banks amounted to N1.037 trillion, representing a shortfall of N1.472 trillion.
Based on the stipulation of the CBN, Access Corporation, the parent company of Access Bank has paid-up capital and share premium of N251.811 billion according to its 2023 full-year result released yesterday hence a shortfall of N248.189 billion.
FBN Holdings, the parent company of FirstBank has paid-up capital and share premium of N251.3 billion, hence a shortfall of N248.66 billion, according to its Q3’23 results
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