CBN orders 3 banks to recapitalise by 2016

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Central Bank of Nigeria (CBN) in a report has directed  three Deposit Money Banks (DMBs) until June 2016 to recapitalise after failing to hit a minimum capital adequacy rate of 10 per cent,

The apex banking regulotry body did not disclose those banks but said they have licenses to operate as regional and national lenders, with respective capital bases of N10 billion  and N25 billion.

With a number of  banks having postponed moves to raise fresh funds, the CBN said it was monitoring the three lenders’ recapitalisation plans, and that 10 others with international status met the 15 per cent minimum capital rate for that category of bank at the end of June.

DMBs have been shoring up their capital base in preparation for adopting stricter international requirements that analysts said could erode capital ratios by between 100 and 400 basis points to near the regulatory minimum of 15 per cent.

Ecobank and Nigeria’s 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.

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