CBN suspends dividend, bonus payments for banks under forbearance

Add us on Google

The Central Bank of Nigeria (CBN) has suspended dividend payments to shareholders and bonuses to directors and senior management staff of banks currently benefiting from regulatory forbearance.

Join the Premium Times WhatsApp Community For Quick Access To News and Happenings Around You.

Open in WhatsApp

The directive was contained in a circular dated 13 June, signed by the bank’s Director of Banking Supervision, Olubukola Akinwunmi.

According to the CBN, the move is part of efforts to strengthen capital buffers, enhance balance sheet resilience and promote prudent internal capital retention within the banking sector during what it described as a transitional period.

The regulatory forbearance arrangement, which allows banks some relief in meeting credit exposure and Single Obligor Limit (SOL) requirements, is currently being reviewed by the central bank in terms of capital positions and provisioning adequacy.

As part of this review, the CBN directed affected banks to suspend dividend payments, defer bonuses, and refrain from making investments in foreign subsidiaries or launching new offshore ventures.

READ ALSO: CBN, Presidency unveil national framework to improve confidence in banks

“This temporary suspension is until such a time as the regulatory forbearance is fully exited and the banks’ capital adequacy and provisioning levels are independently verified to be fully compliant with prevailing standards,” the CBN said.

The bank added that the measure is to ensure that internal resources are retained to meet existing and future obligations and support “the orderly restoration of sound prudential positions.”

Stay Ahead with Premium Times

Follow us on Google News and never miss breaking stories, investigations, and in-depth reporting.

Add as a preferred source on Google

The CBN also said it will continue to monitor developments and engage with institutions as necessary.

The move comes amid efforts to tighten supervision across the financial system following recent banking sector reforms and recapitalisation directives.