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ACAMB commends CBN’s recapitalisation requirements

The Association of Corporate & Marketing Communication Professionals of Banks (ACAMB) has commended the Central Bank of Nigeria (CBN) for its new recapitalization measures aimed at strengthening Nigerian banks.

The News Agency of Nigeria (NAN) reports that CBN raised minimum capital requirements for commercial banks to ₦50 billion, ₦200 billion, and ₦500 billion for regional, national, and international licenses, respectively.

The aim of the new recapitalization requirements is to make the banking sector stronger and more viable.

Mr. Rasheed Bolarinwa, the President of the association, said in a statement in Lagos that the recapitalization exercise would position Nigerian banks to strengthen the economy, expand the real sector, and build bigger, more globally competitive brands.

He commended the regulator for segmenting the minimum capital base for different categories of banks to give them level playing fields.

He said the association particularly noted the distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium.

He added that this was different from the previous use of shareholders’ funds.

“As it stands, banks are on the same page. And as such, there is no need whatsoever for any fear, as the banks have the capacity to meet the recapitalization in line with allowable options stipulated by the apex bank,” he said.

Bolarinwa explained that the association had backed other stakeholders in giving support to the announcement for recapitalization by CBN Governor Yemi Cardoso.

According to him, this support underlines ACAMB’s belief that while Nigerian banks are globally regarded as safe, resilient, and thriving, there is always room for growth.

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“As Nigeria seeks to aggressively unlock its innate potential to become a global emerging economy, banks must also stand ready to play their crucial role of financial intermediation.

“The CBN circular on review of minimum capital requirements for commercial, merchant, and non-interest banks over the next 24 months has laid to rest any anxiety about the intention, process, and possible outcome of the new recapitalization exercise.

“The import of the recapitalization announced is that Nigerian banks are safe and reliable, but the apex bank, in its developmental mandate, is leading the banks to strengthen their capacities to meet competitive domestic and global financial needs.

“This overarching theme that runs through the circular and its explanatory notes further affirms the soundness of the banking sector, in line with several rating reports on Nigerian banks by leading local and international rating agencies.

“We commend the CBN for the thoughtfulness it has put into the announced modality for the recapitalization,” he said.

Bolarinwa said the recapitalization was a win-win for the Nigerian banks, the financial market, and the economy.

He said the Nigerian capital market, where banks were the most influential group, had the depth to meet the capital requirements of banks.

He added that the extended timeline, until 2026, provided ample opportunity for all banks to follow through on the recapitalization plan without undue crowding effect.

“With their background of good returns and liquidity, banking stocks are toasts to domestic and foreign investors.

The ACAMB boss assured that the banking industry will continue to work with financial authorities to build up the economy.

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“This recapitalization will put Nigerian banks in better stead to support the strengthening of the economy, the expansion of the real sector, and the building of bigger banking brands that can compete continentally and globally.

“Banks will continue to cooperate with the CBN in the implementation of the recapitalization programme.

“ACAMB shall also be engaging all stakeholders in order to ensure balanced and factual representation as the recapitalization progresses.

“ACAMB reassures all depositors and shareholders to keep their businesses with the Nigerian banks without fear,” he said. (NAN)

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