Bank mergers are on the horizon as the Central Bank of Nigeria (CBN) has increased the minimum capital thresholds for banks. The CBN announced this through a circular signed by Haruna Mustafa, the Director of the Financial Policy and Regulation Department, and distributed to all types of banks – commercial, merchant, and non-interest.
The CBN has set the minimum capital requirement for commercial banks with international authorization at N500 billion, up from N50 billion in 2005. Additionally, other categories of banks are required to meet specific minimum capital requirements: N200 billion for banks with National Spread, N50 billion for Regional and Merchant Banks, N20 billion for National Non-Interest Banks, and N10 billion for Regional Non-Interest Banks.
All banks must comply with these new capital requirements within 24 months, starting from April 1, 2024, and ending on March 31, 2026.
The circular emphasizes the necessity for banks to bolster their capital in the face of prevailing macroeconomic challenges and various shocks, both domestic and external. This move aims to ensure the resilience, solvency, and ability of banks to continue supporting the growth of the Nigerian economy. It aligns with the CBN’s mandate to foster a secure, robust, and stable banking system, as outlined in Section 9 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
It’s worth noting that back in 2005, the capital requirement for obtaining an international banking license was N50 billion, while national banks were required to have a minimum capital of N25 billion.
