34 Banks Scale Recapitalisation Hurdle

Thirty-four banks have met the new minimum capital threshold eight days to the deadline for banking recapitalisation, The Nation has confirmed.

A provisional list reviewed yesterday showed that all the major banks with international banking licences, which control more than 70 per cent of the industry and most national banks have scaled the recapitalisation hurdle.

The Central Bank of Nigeria (CBN) is expected to issue final status report next week.

The apex bank had in March 2024, set March 31, 2026 as deadline for the recapitalization.

Experts said the ongoing process while stricter on the basis of qualifying capital has been the most successful in the country’s history of recapitalisation.

Most experts said they expected nearly all banks to be cleared by the apex bank given the current level of compliance and last-minute efforts by banks to verify private capital injections.

Under the process, qualifying capital for the new minimum requirement is the addition of share capital and share premium, as against the previous use of shareholders’ funds.

The provisional compliance list showed that Guaranty Trust Holding Company (GTCO), FCMB Group, Fidelity Bank, Zenith Bank, Access Holdings, First HoldCo and United Bank for Africa (UBA) have surpassed the N500 billion minimum capital requirements for their international banking licences.

The list also showed that 10 national banks have met the N200 billion new minimum capital requirements for their operations.

These are: Stanbic IBTC Holdings Plc, Wema Bank Plc, Ecobank Nigeria, Sterling Financial Holdings Company Plc, Premium Trust Bank, Standard Chartered Bank, Globus Bank, Optimus Bank, Citibank and Providus-Unity Bank consortium, which is concluding a CBN-sanctioned business combination.

In a major boost to the non-interest finance sector, all the four banks which operate on the principles of Islamic finance, have met the N20 billion minimum capital requirements for the segment.

They are Jaiz Bank Plc, Lotus Bank, Taj Bank and Sterling HoldCo’s The Alternative Bank.

There were also indications that a new non-interest bank, currently seeking licence at the apex bank, has met the new regulatory capital.

On the list are six banks with regional banking licences- Parallex Bank, Signature Bank, Suntrust Bank, Alpha Morgan Bank, NOVA Bank and Tatum Bank.

Regional banks, which are limited to operating with specified region of the country are required to have new minimum capital of N50 billion.

The apex bank is also expected to provide greater details next week on the treatment of three banks under its intervention-management. These are Polaris Bank, Keystone Bank and Union Bank of Nigeria (UBN).

Governor of Central Bank of Nigeria, Mr. Olayemi Cardoso had earlier addressed concerns about the three banks-Polaris Bank, Union Bank and Keystone Bank, noting that they may not follow the same recapitalisation timeline because of legal and structural issues affecting them.

He said: “We remain actively engaged with all relevant stakeholders to ensure that they have an orderly and credible outcome while maintaining financial stability.”

Cardoso assured Nigerians that “depositor funds in these institutions (Polaris Bank, Union Bank, Keystone Bank) remain secure and operations continue under close supervisory and regulatory oversight of the CBN.”

The nation’s wholesale banking space also remained almost unaffected by the recapitalisation programme as most merchant banks have met their new minimum capital base of N50 billion.

On the list were Greenwich Bank, FSDH Merchant Bank, Rand Merchant Bank, Quest Merchant Bank and Coronation Merchant Bank.

Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the Cardoso-led recapitalisation has been the most successful in terms of impact and fallout.

He expressed optimism that at the end of the recapitalisation exercise, there would be no visible disruption to customers’ businesses and displacement of employees, contrary to the previous exercise that led to closure of several banks.

Unity Bank yesterday confirmed that its merger with Providus Bank has reached final stages.

The bank stated that contrary to reports that it was yet to meet the recapitalisation requirement, its merger with Providus Bank, approved by the CBN, has given the emergent bank the new minimum capital requirement.

The report states: “As you may recall, the Central Bank of Nigeria (CBN) supported the proposed merger between Unity Bank and Providus Bank as part of the institutions’ strategy to meet the recapitalisation threshold.

“This approval included a pivotal financial accommodation designed to support the transaction. The financial accommodation has been converted to Tier-1 capital, bringing the combined capital base of Unity Bank and Providus Bank well above the N200 billion minimum required to retain a national banking licence under the CBN’s recapitalisation framework.

“As previously communicated, the merger process is currently in its final stages, following approvals from the CBN and shareholders of both banks.

“The transaction has also progressed with additional regulatory clearances from the Securities and Exchange Commission (SEC) and other relevant authorities. Integration activities between the two institutions are already underway, while the final court sanction is expected to conclude the process in the coming days, ahead of the March 31 deadline set by the CBN for the recapitalization process,” Unity Bank stated.