The Central Bank of Nigeria, CBN, has assured that Nigerian banks are safe, following the outcome of a stress test it conducted.
This is contained in a statement signed by the Director of Corporate Communications of the CBN, Ibrahim Mu’azu, on Sunday in Abuja.
“Following the recent top-down stress tests of Deposit Money Banks carried out; the CBN re-affirms that the banks have adequate capital to absorb unexpected losses,” the statement said.
It noted that unaudited results of banks and the results released so far indicated that the economic meltdown had not significantly affected returns.
The statement noted that banks had been directed to have effective risk management system in place, especially price hedging.
It said that the apex bank would continue to monitor banks to ensure sufficient internal retention of capital to serve as buffers.
The statement recalled that the IMF in a report on March 4 on the outcome of the Executive Board 2014 Consultation with Nigeria commended the CBN for ensuring financial system soundness.
It noted that financial soundness indicators remained above prudential norms but that the concentration of credit risks and foreign currency exposures called for continued close oversight.
According to the statement, the CBN welcomes the progress in strengthening supervision and regulation, including cross-border activities.
It added that the apex bank encouraged additional initiatives to foster financial market development, including hedging instruments and improved financial inclusion.
The statement noted that Nigeria’s economic data were broadly adequate for surveillance.
It said that the CBN agreed on tightening fiscal policy and allowing the exchange rate to depreciate.