Zenith Bank said it is making last-ditch efforts to meet the subsequent conditions for a temporary relief the Central Bank of Nigeria (CBN) granted to lenders in 2020, allowing them to restructure problem loans without the need to make full provision for them in their books.
“We are confident that this exposure will be brought within the applicable regulatory limit on or before 30 June 2025,” the bank stated in a notification to the Nigerian Exchange on Wednesday.
|
|
The CBN ordered lenders with forbearance exposures on Friday to halt dividend payments and executive bonuses, as well as suspend international expansion plans, setting the end of this month as the deadline for compliance.
According to a report by Renaissance Capital, Zenith Bank, First HoldCo, Fidelity Bank, FCMB Group, United Bank for Africa, and Access Holdings are affected. Zenith’s forbearance exposure is 23 per cent of its total loans, the highest in the industry.
|
|
|
|---|
Following a series of loan defaults by borrowers during the COVID-19 crisis, the CBN gave banks the grace to extend the tenor of their impaired facilities without classifying them immediately to prevent their balance sheets from taking a hit.
Other reliefs granted on the total exposure estimated at between N7 and N8 trillion included repayment holidays and lower interest rates on intervention loans.
READ ALSO: Zenith Bank wins Best Bank in Nigeria in the Global Finance Best Banks Awards 2025
“However, this relief extended well beyond the pandemic’s acute phase, creating a prolonged window during which banks could avoid recognising impaired assets,” Meristem Securities remarked in a note to clients on Wednesday, seen by PREMIUM TIMES.
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 investment bank went further to say that the trend has masked the true picture of the banks’ non-performing loan ratios, which are deceptively low at an average of 4.5 to 5 per cent, “despite mounting underlying stress.”
Zenith Bank, which typically pays an interim dividend half-yearly, said it hopes to meet the central bank’s demands before the end of the month to distribute cash rewards to shareholders.
Discover more from Premium Times Nigeria
Subscribe to get the latest posts sent to your email.
More News
![President of South Africa, Cyril Ramaphosa. {PHOTO CREDIT: Official Facebook page of Ramaphosa || Cyril Ramaphosa]](https://i0.wp.com/media.premiumtimesng.com/wp-content/files/2023/12/IMG-20231230-WA0000.jpg?fit=1081%2C720&ssl=1)
