Zenith Bank Plans to Exit CBN’s Forbearance Arrangements by Mid-2025
In a move to reassure investors and stakeholders, Nigeria’s leading financial institution, Zenith Bank, has announced its plans to exit all Central Bank of Nigeria’s (CBN) forbearance arrangements by the end of the first half of 2025. This decision comes amid concerns over the bank’s exposure under the Single-Obligor Limits (SOL) and its ability to meet regulatory requirements.
According to a notice released by the bank’s secretary, Michael Otu, Zenith Bank’s exposure under the SOL relates solely to a single obligor. The bank has assured that this exposure will be brought within the applicable regulatory limit on or before June 30, 2025. Additionally, the bank has made substantial provisions and taken comprehensive steps to ensure full provisioning for two other customers that were granted forbearance on other credit facilities.
The CBN had earlier directed banks under its regulatory forbearance to halt all dividend payments, bonuses, and investments in foreign subsidiaries to strengthen their capital adequacy. Zenith Bank, however, has successfully raised and surpassed the new CBN recapitalization requirement of N500 billion. The bank’s management has expressed confidence that it will satisfy all relevant conditions to enable it to pay dividends to shareholders in the current year.
In a statement, Zenith Bank reiterated its commitment to meeting regulatory requirements and ensuring the stability of its operations. "We have successfully raised and surpassed the new regulatory capital requirement of N500 billion. Our exposure under the SOL forbearance relates solely to a single obligor, and we are confident that this exposure will be brought within the applicable regulatory limit on or before June 30, 2025," the bank stated.
The announcement is expected to boost investor confidence in Zenith Bank and the Nigerian banking sector as a whole. With its strong financial position and commitment to regulatory compliance, Zenith Bank is poised to maintain its leadership position in the Nigerian banking industry. As the bank works to exit the CBN’s forbearance arrangements, it is clear that Zenith Bank is dedicated to ensuring the long-term sustainability and stability of its operations.
