to present a clearer directive on the treatment of retained earnings in the recapitalisation of banks, The Nation has learnt.The recapitalisation exercise is expected to commence from April 1, 2024 , through March 31, 2026.
Many of the lenders pushing for clarity believe a definite pronouncement devoid of ambiguity will guide their capital raising plan. The CBN had last week, announced the upward review of the minimum capital requirement for lenders in the country to mitigate the impact of external and domestic shocks via negative exchange rate movement and elevated inflation.
They explained that from initial assessment, positives from the recapitalisation drive includes strengthening the capacity of banks to support credit creation in the real sector, the potential influx of capital into the domestic economy through offshore capital-raising endeavours and the likelihood of the emergence of stronger and more resilient banking entities post-recapitalization.
“As a result, banks may face challenges in maintaining their capital adequacy ratios and meeting regulatory requirements,” he said .