✕ CLOSE Online Special City News Entrepreneurship Environment Factcheck Everything Woman Home Front Islamic Forum Life Xtra Property Travel & Leisure Viewpoint Vox Pop Women In Business Art and Ideas Bookshelf Labour Law Letters
Click Here To Listen To Trust Radio Live
SPONSOR AD

Why we excluded retained earnings from bank’s capitalization – CBN

The Central Bank of Nigeria (CBN) has explained that the rationale for exclusion of retained earnings by banks is targeted at injecting fresh capital into…

The Central Bank of Nigeria (CBN) has explained that the rationale for exclusion of retained earnings by banks is targeted at injecting fresh capital into the system.

The apex bank spoke through its Director, Financial Policy and Regulatory Department (FPRD), Haruna B. Mustafa, in a podcast titled ‘Banking Sector Recapitalisation Programme 2024.

It would be recalled that in March 28, 2024, the CBN raised capital requirements for banks operating in the country to N500bn for international, N200bn for national and N50bn for regional banks.

However, the bank said other reserves and Additional Tier 1 (AT1 Capital) shall not be allowed or recognized for the purpose of meeting the new minimum capital requirements.

Mustafa said, “Section 9 and Section 63 (2a) of the Bank’s and Other Financial Institutions Act, 2020 empower the central bank to determine the capital of banks and also the timeline within which banks should comply with those requirements.

“It also enables the CBN to set the level and quality of capital that all the banks will have. And this is without prejudice to what should constitute the shareholder’s funds.

“What the central bank has simply done is to ensure that banks inject fresh equity, fresh capital. Don’t forget, banks are in the business of financial intermediation, and this comes with risks. The capital is there to absorb some of these risks or losses that may arise from their operations.”

He explained further that Nigeria’s banking system is safe, sound and resilient, adding that the regulator is only trying to enhance and further strengthen the banking system.”

 

LEARN AFFILIATE MARKETING: Learn How to Make Money with Expertnaire Affiliate Marketing Using the Simple 3-Step Method Explained to earn $500-$1000 Per Month.
Click here to learn more.

AMAZON KDP PUBLISHING: Make $1000-$5000+ Monthly Selling Books On Amazon Even If You Are Not A Writer! Using Your Mobile Phone or Laptop.
Click here to learn more.

GHOSTWRITING SERVICES: Learn How to Make Money As a Ghostwriter $1000 or more monthly: Insider Tips to Get Started. Click here to learn more.
Click here to learn more.

SECRET OF EARNING IN CRYPTO: Discover the Secrets of Earning $100 - $2000 Every Week With Crypto & DeFi Jobs.
Click here to learn more.