Zenith Bank to exit CBN regulatory forbearance in June, assures dividend payment

Zenith Bank Plc has said it will exit the Central Bank of Nigeria’s regulatory forbearance regime by 30 June, moving to reassure shareholders of its ability to continue dividend payments despite tightened oversight from the apex bank.

In a disclosure to the Nigerian Exchange Group on Tuesday, the bank said it had taken “appropriate and comprehensive steps” to meet all regulatory requirements tied to its forbearance status, including full provisioning for affected credit facilities.

The clarification comes after the CBN, in a circular dated 13 June, barred banks under regulatory forbearance from paying dividends, awarding bonuses to senior executives, or investing in foreign subsidiaries. The policy is part of efforts to improve capital buffers and promote internal capital generation within the banking sector.

Zenith Bank said its forbearance status relates to a single obligor exposure, which it expects to regularise by the end of June. It added that only two customers are involved in other credit facilities under forbearance, and that substantial provisions have already been made.

“Zenith Bank has surpassed the new minimum capital requirement of N500 billion and is well positioned to continue delivering value to all stakeholders,” the statement said.

Earlier, Access Bank, in a corporate filing dated 18 June, said it is “on track” to fully meet all forbearance-related conditions by 30 June. The lender also confirmed that it is currently compliant with the Single Obligor Limit (SOL), one of the core prudential thresholds addressed in the CBN’s 14 June circular.

“In accordance with the Central Bank of Nigeria’s directive mentioned in the referenced letter, the bank is currently compliant with the Single Obligor Limit requirement as of the date herein and will continue to ensure adherence to this regulation,” Sunday Ekwochi, Access Bank’s company secretary, said.

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FCMB Group also disclosed on Tuesday that it had made “significant progress” in resolving legacy credit exposures. It said a key obligor currently under SOL forbearance will be brought within limit by 30 September 2025 by converting a N23.1 billion convertible loan into equity. The lender noted that it had secured CBN approval for capital verification and is finalising other required regulatory clearances.

A research note published by Renaissance Capital on 17 June had identified Zenith Bank, FirstBank and Access Bank as the most exposed to regulatory forbearance, with affected loans accounting for 23 per cent, 14 per cent, and 4 per cent of their gross loan books respectively. According to the note, these exposures are “predominantly concentrated in loans to a major Oil & Gas counterparty, particularly in the upstream and refinery subsectors.”

Regulatory forbearance allows banks temporary relief from strict prudential requirements such as capital adequacy ratios or SOL, often in cases of large or stressed exposures.