CBN has given 3 commercial banks until June 2016 to recapitalize, after they failed to hit a minimum capital adequacy rate of 10%
The CBN did not name the banks but said they were from the group of 14 that have licenses to operate as regional and national lenders, with respective capital bases of N10 billion and N25 billion.
CBN said it was monitoring the three lenders’ recapitalization plans, and that 10 others with international status met the 15 percent minimum capital rate for that category of bank at the end of June.
Last week, CBN told commercial banks to double provisions on performing loans to 2% to build adequate buffers against unexpected losses, as liquidity ratios fall.
It said lower revenues for government and oil companies due to plunging crude prices have led to unsecured exposures for banks that are likely to increase credit risk and loan losses.
NPLs in Nigeria’s banking sector rose to 4.65 percent at the end of June due to a fall in asset quality following a devaluation of the naira and amid rising inflation, the central bank said in the report.
Stanbic IBTC last week said it had doubled its non-performing loan ratio to 8.8 percent. It was also planning to raise fresh funds.
Ecobank and Skye Bank have both suspended plans to raise fresh equity owing to weak market conditions and slower loan growth.
Wema Bank, which suspended plans partly because of the naira weakness, said on Thursday it would resume a share sale next year and has started a process to raise $100 million worth of naira bonds after getting approval to switch from a regional to a national bank.
Ratings agency Moody’s said this week it expected non-performing loans (NPLs) to rise above 5 percent but remain below 10 percent over the next two years as the weaker naira increases the risk of dollar loans and suppresses bank capital.