The Central Bank of Nigeria (CBN) has
given three commercial banks until June 2016 to recapitalise after they
failed to hit a minimum capital adequacy rate of 10 per cent, it said in
a report on its website.
The central bank did not name the banks but said they were from the group of 14 in Africa's biggest economy that have licenses to operate as regional and national lenders, with respective capital bases of N10billion ($50million), and N25billion.
With a number of Nigerian banks having postponed moves to raise fresh funds, the central bank said it was monitoring the three lenders' recapitalisation plans, and that 10 others with international status met the 15 per cent minimum capital rate for that category of bank at the end of June.
A Reuters report weekend, said the recapitalisation schedule, contained in a report dated Oct. 30, only came to light last Friday. It said lenders have been shoring up their balance sheets in preparation for adopting stricter international requirements that analysts say could erode capital ratios by between 100 and 400 basis points to near the regulatory minimum of 15 per cent.
The central bank did not name the banks but said they were from the group of 14 in Africa's biggest economy that have licenses to operate as regional and national lenders, with respective capital bases of N10billion ($50million), and N25billion.
With a number of Nigerian banks having postponed moves to raise fresh funds, the central bank said it was monitoring the three lenders' recapitalisation plans, and that 10 others with international status met the 15 per cent minimum capital rate for that category of bank at the end of June.
A Reuters report weekend, said the recapitalisation schedule, contained in a report dated Oct. 30, only came to light last Friday. It said lenders have been shoring up their balance sheets in preparation for adopting stricter international requirements that analysts say could erode capital ratios by between 100 and 400 basis points to near the regulatory minimum of 15 per cent.
Meanwhile, low capital conditions arising from slowing economic growth have weakened domestic markets, analysts say. Last week, CBN told commercial lenders to double provisions on performing loans to two per cent to build adequate buffers against unexpected losses, as liquidity ratios fall.
It said lower revenues for government and oil companies due to plunging crude prices have led to unsecured exposures for banks that are likely to increase credit risk and loan losses.
The Non-Performing Loans (NPLs) in the banking sector rose to 4.65 per cent at the end of June due to a fall in asset quality following devaluation of the naira and amid rising inflation, Reuters cited a recent CBN report.
Stanbic IBTC last week said it had doubled its non-performing loan ratio to 8.8 per cent while planning to raise fresh funds. Ecobank and Nigeria's Skye Bank were reported to have suspended plans to raise fresh equity owing to weak market conditions and slower loan growth.
Credit: Daily Trust
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