Commercial banks in Nigeria may need about N4.7 trillion to meet the recapitalization benchmark prescribed by the Central Bank of Nigeria (CBN) in the past week. Findings from the audited and unaudited financial positions of 12 leading banks in the Nigeria Exchange Limited indicated a funding gap of N2.8 trillion while others outside the Exchange are estimated at N1.9 trillion. The CBN on March 28th announced the upward review of the minimum capital requirement for banks in the country. The Apex bank mandated minimum capital of N500 billion, N200 billion and N50 billion for Commercial Banks with International, National, and regional licenses respectively. Likewise, the CBN also raised the capitalization baseline for Merchant Banks to N50 billion and Non-interest Banks to 20 billion and 10 billion for national and regional licenses respectively.
A breakdown of the cumulative figure shows that Ecobank Transnational Inc (ETI) has N353.3 billion Total Eligible Capital (TEC) leaving it with a funding gap of N147 billion, while Zenith Bank with TEC of N270.7 billion has a funding gap of N229.3 billion as at September 2023 unaudited financial statement. Access Bank which has the most current financial statement audited as of December 2023 recorded a TEC of N251.8 billion still has a funding gap of N248.2 billion, while First Bank which recorded a TEC of NN251.3 billion in its unaudited financial statement as of September 2023 would require additional N248.7 billion to meet the new capital base.
TEC for all other banks is significantly below N200 billion leaving them with funding gaps ranging between NN90.7 billion and N480 billion under the new TEC. However, analysts believe if CBN adjusts its prescription to accommodate Retained Earnings (REs) about seven banks would be comfortably above the new minimum capital base. The seven banks include Zenith Bank with the largest REs at NN893.9 billion as of September 2023, followed by UBA with N750.8 billion as of September 2023 and Access with N715.1 billion in full-year 2023 audited financial statement. Others are ETI, First Bank, GTB and Stanbic IBTC recording N683.1 billion, N675.1 billion, N424.5 billion and N309.6 billion respectively in their REs. Industry analysts hinted they are expecting CBN to give more clarifications on the policy, especially regarding the treatment of REs.
