Zenith Bank and Access Holdings, two prominent Nigerian financial institutions, have affirmed their commitment to comply with the Central Bank of Nigeria’s (CBN) directive on regulatory forbearance by the stipulated deadline of June 30, 2025. This directive, issued in a circular dated June 13, 2025, imposes restrictions on certain banks regarding dividend payments, bonuses, and investments in foreign subsidiaries due to regulatory forbearance granted in relation to the Single Obligor Limit (SOL) and other credit facilities. The CBN’s regulatory forbearance allows these banks additional time to rectify their positions concerning these specific regulatory requirements.
Zenith Bank, in a statement released to the Nigerian Exchange Limited (NGX), clarified the scope of its forbearance arrangements. The bank confirmed that it had already surpassed the CBN’s newly revised minimum capital requirement of ₦500 billion for internationally authorized commercial banks. Concerning the SOL forbearance, Zenith Bank explained that it pertains to a single obligor and expressed confidence in its ability to bring this exposure within the permissible regulatory limit by the June 30, 2025 deadline. The bank further disclosed that the forbearance granted on other credit facilities involves only two customers. Substantial provisions have already been made against these facilities, and the bank has implemented comprehensive measures to ensure full provisioning by the same deadline. Once this is achieved, Zenith Bank will no longer be subject to any forbearance arrangements related to these credit facilities. The bank projects a complete exit from all CBN forbearance arrangements by the end of the first half of 2025. Importantly, Zenith Bank also reassured its shareholders of its capacity to meet the necessary conditions for dividend payments in the current year.
Access Holdings, in its own statement to the NGX, emphasized its current compliance with the single obligor limit requirement and its ongoing commitment to adhering to this regulation. Regarding the regulatory forbearance on credit facilities, Access Holdings echoed Zenith Bank’s commitment to comply with the CBN’s directive by June 30, 2025. The holding company also underscored its strong capital position and its intention to continue paying dividends to its shareholders. Both Zenith Bank and Access Holdings reiterated their dedication to delivering sustainable value to their stakeholders in both the short and long term. These assurances come in the wake of the CBN’s directive, which seeks to bolster the financial health and stability of the banking sector.
The CBN’s directive on regulatory forbearance focuses on addressing specific challenges related to the Single Obligor Limit (SOL) and other credit facilities. The SOL restriction aims to limit the risk exposure of banks to individual borrowers, preventing excessive concentration of lending to a single entity. This safeguard is crucial for maintaining the stability of the financial system, as overexposure to a single borrower could have significant repercussions if that borrower defaults. By imposing temporary restrictions on capital distributions, such as dividends and bonuses, the CBN encourages banks to retain earnings and strengthen their capital adequacy. This measure provides a financial cushion to absorb potential losses and ensures the banks’ resilience in the face of economic uncertainties.
The regulatory forbearance granted by the CBN allows affected banks a period of grace to address these issues and bring their operations in line with the prescribed regulations. This approach allows the banks to implement corrective measures and strengthen their financial positions without facing immediate penalties or disruptions. The CBN’s close supervisory engagement with these banks demonstrates its commitment to monitoring their progress and ensuring their adherence to the stipulated timelines for compliance. The central bank’s actions underscore its proactive approach to maintaining the stability and soundness of the Nigerian banking sector.
The CBN’s clarification that the directive affects only a limited number of banks aims to reassure the market and prevent unnecessary concerns about the overall health of the banking system. The fact that both Zenith Bank and Access Holdings have already surpassed the minimum capital requirement indicates their financial strength and ability to navigate these regulatory challenges. Their commitment to complying with the CBN’s directive further reinforces confidence in their ability to maintain a healthy financial position while delivering returns to their shareholders.
The Nigerian banking sector plays a critical role in the country’s economic development. The CBN’s regulatory measures, including the directive on forbearance, are designed to strengthen the sector and ensure its long-term stability. By addressing specific risks and promoting prudent financial management, the CBN contributes to building a resilient and robust banking system capable of supporting sustainable economic growth. The actions taken by Zenith Bank and Access Holdings to comply with this directive demonstrate their commitment to the stability of the Nigerian financial system and their confidence in their ability to navigate the evolving regulatory landscape.
