Weeks after the conclusion of the banking sector recapitalisation exercise, anxiety has continued to mount among customers of banks entangled in regulatory and judicial processes over the fate of their deposits.
However, the Central Bank of Nigeria (CBN) has allayed these fears, assuring that the affected institutions, despite their current challenges, remain adequately capitalised to meet the prescribed minimum capital requirements.
It would be recalled that the merger between Providus Bank and Unity Bank, the only one to emerge from the recapitalisation exercise, despite obtaining the required regulatory approvals, is yet to be legally signed off.
Also, the fate of Union Bank seems uncertain after a Federal High Court in Lagos reinstated the Union Bank Board and ruled that the Central Bank of Nigeria acted outside its statutory powers in dissolving its board and management, declaring the January 2024 intervention unlawful.
However, the CBN has approached the Court of Appeal to overturn a ruling that invalidated its dissolution of Union Bank’s leadership, arguing that the intervention was necessary to prevent a systemic financial collapse.
There is also the issue of Polaris Bank and Keystone Bank, which are still under regulatory care. Despite these banks not being counted among those that met the minimum capital before the March 31, 2026 deadline, CBN Governor Olayemi Cardoso had stated that they had the capacity to meet the required capital base.
Speaking on the sidelines of the just concluded World Bank/International Monetary Fund meetings, Cardoso noted that once the regulatory and legal processes were resolved, the banks in question would be able to meet the required capital base.
“There are some particular banks going through various forms of regulatory and legal issues, and in the fullness of time they will also join the group of those that have been fully capitalised to the level that the regulations require.
“To be fair to them, when this announcement was made over two years ago, a number of these banks had issues that arose after that, so you cannot, therefore, apply the same time horizon as you apply to others,” Cardoso stated.
The CBN governor expressed confidence that the remaining lenders would close their capital gaps once the encumbrances are resolved, maintaining that there are no immediate concerns around their operations.
“As I had said in that announcement, once and when those issues are resolved, then we expect that they will be able to meet the requirements. And as of now, business is going on as normal in those banks,” he assured.
Noting that the broader recapitalisation exercise has already marked a decisive success, Cardoso said the Nigerian banking sector had effectively turned a corner, having overcome initial scepticism that greeted the policy when it was first unveiled.
“When we made this announcement over two years ago, it appeared as if this was just pie in the sky and it would never happen, but it happened, and it has happened very well indeed. Roughly, 73 per cent domestic, 27 per cent foreign. Recall that we have been talking about investor confidence.
“That is a very, very strong reflection of domestic and foreign investor confidence. It is really big and I don’t want us to take it lightly. We look at these things as if it is just one of those things. It isn’t.”
“And honestly, when we share this kind of data with various colleagues who have come to the meetings, they are very pleasantly surprised that we have been able to accomplish what we have in this particular sector,” he said.
On access to the bank recapitalisation programme, Cardoso said Nigeria had firmly moved past early doubts about the reform’s feasibility, stressing that the outcome has fully validated the policy direction. “On the bank recapitalisation, Nigeria has moved on,” he stated.
