The Central Bank of Nigeria’s (CBN) recent directive mandating banks under regulatory forbearance to halt dividend payments, bonuses, and offshore investments has stirred mixed reactions across the financial landscape.
In a circular dated June 13, 2025, and signed by the Director of Banking Supervision, Dr. Olubukola Akinwunmi, the apex bank instructed all affected banks to immediately suspend dividend payments to shareholders, bonus payouts to top executives, and new investments in foreign subsidiaries. The move is aimed at strengthening the financial resilience of these banks and ensuring full compliance with capital adequacy and loan provisioning requirements.
The CBN clarified that the restrictions are temporary and will be lifted once the affected banks exit regulatory forbearance and undergo independent verification confirming their capital and provisioning levels meet regulatory benchmarks.
While many analysts welcomed the directive as a prudent measure to reinforce financial discipline, others warned of potential negative implications for investor confidence and share prices, especially as the circular did not name the specific banks involved.
Adetilewa Adebajo, CEO of CFG Advisory, praised the move as a necessary step towards rebuilding stronger bank balance sheets. “Banks must make full provisions for their non-performing loans (NPLs), which may temporarily affect profitability. However, this will boost long-term capital retention and potentially support stock values,” he noted.
He added that the suspension of dividends and bonuses would signal the CBN’s firm regulatory stance and encourage banks to prioritise asset quality and risk management.
Similarly, Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., said the decision underscores the CBN’s determination to end regulatory forbearance by June 30, as previously hinted. However, he noted that banks may now face disruptions in resolving NPLs and declaring dividends this month.
“Many banks had begun addressing those loan facilities. But this directive changes the landscape and could affect those that usually declare dividends in June. Foreign expansion plans, especially those tied to recent capital raises, may also face delays,” Olubunmi explained.
He added that most planned offshore investments were not due until 2026, meaning the impact on expansion may be minimal in the short term.
Analysts at Proshare offered a more cautious view, warning that the directive might trigger sell-offs among shareholders disappointed by the suspension of dividends. “If investors react by dumping shares, banks’ stock prices may decline, even if their fundamentals remain strong,” they said.
They also highlighted that CBN’s monetary policies could inadvertently spill over into the capital markets, affecting outcomes overseen by the Securities and Exchange Commission (SEC).
Despite concerns, the analysts acknowledged the CBN’s efforts to restore prudence in banking and reduce the build-up of risky assets.
A senior CBN source defended the timing and manner of the directive, noting that banks had long been aware of the June 30 deadline for the end of regulatory forbearance. “This announcement reinforces the message that the deadline is real and signals serious consequences for non-compliance. It also informs corporate borrowers that the CBN is serious about addressing lingering loan issues,” the source said.
According to the apex bank, the suspension is part of a broader strategy to ensure sustainable reforms in the banking sector, curb excessive risk-taking, and protect long-term shareholder interests.
As the June deadline looms, attention now turns to how swiftly affected banks will meet the CBN’s conditions, resolve outstanding NPLs, and restore confidence among investors and stakeholders.
Nzubechukwu Eze
