CBN Halts Dividend Payments to Foreign Subsidiaries by Nigerian Banks Under Regulatory Forbearance
Written by SpringnewsNG Media Limited – June 14, 2025
This directive, outlined in a circular released on Friday by Olubukola Akinwunmi, Director of Banking Supervision at the CBN, is part of ongoing efforts by the apex bank to strengthen financial stability and enforce prudential practices across the Nigerian banking sector.
According to the CBN, the temporary suspension is aimed at reinforcing capital buffers, enhancing balance sheet resilience, and ensuring that Nigerian banks retain sufficient internal capital to meet both current and future obligations. The policy will remain in effect until banks under regulatory forbearance are able to fully exit the program and undergo independent verification of their capital adequacy and provisioning compliance with current regulatory standards.
“This supervisory measure is intended to ensure that internal resources are retained to meet existing and future obligations and to support the orderly restoration of sound prudential positions,” the circular stated.
The move comes amid intensified efforts by Nigerian banks to meet the CBN’s recapitalization deadline set for 2026. The regulator has consistently emphasized the need for stronger capital positions to safeguard the banking system in the face of domestic and global economic volatility.
It is worth recalling that in April 2022, the CBN extended interest rate forbearance on loans by an additional 12 months. Furthermore, in September 2023, it barred banks from utilizing profits from foreign exchange revaluation for dividend payments or capital expenditures—a sign of continued focus on conservative financial management within the sector.
The CBN’s latest directive underscores its commitment to maintaining a resilient and well-capitalized banking industry as the country navigates ongoing economic reforms and global financial headwinds.
