Finance
CBN needs help to resolve the banking crisis
When on August 14 2009, Sanusi Lamido Sanusi announced his radical intervention into the banking system by removing with fanfare the executives of ailing banks, he received applause from many Nigerians who had one grouse or the other against the banks and their chief executives. One of the several issues against the banks which remains true today is the fact that they were not lending to the real sector. The expectation was that after the Sanusi tsunami, the banks will be disposed to lending. Almost two years down the line, the situation is worse than when the CBN intervened in the system. Almost all the branch managers of banks across the country have suddenly become risk managers. No one is ready to finance any project. One of the banks’ branch managers last week owned up to the fact that the role of banks as financial intermediary has been put on hold in Nigeria in the last one and a half years. No bank manager is ready to stick out his neck or job in the name of granting facility. All projects have become risky and as a result, projects that should ordinarily get bank support are brushed aside thus aggravating the unemployment situation in the country.
The CBN admitted that substantial credit to the Government grew by 67.83 per cent, while
credit to the private sector fell by 4.92 per cent (annualized) in December 2010 as against the
benchmark of 31.54 per cent for 2010 thus crowding out the private sector from access to credit.
The financial health of the banks that were rescued is not in any way better than they were even with AMCON which was touted as holding the magic wand to end the banking crisis. In fact, the fate of the rescued banks still hangs in the balance. The CBN had said that its primary responsibility is to depositors and not shareholders and thus disregarded them. He lumped ownership of the banks with the management. This is where many differ from him. If the banks’ boards/directors were found culpable yes, the CBN could deal with them as it deems fit. It was the CBN consolidation that made many Nigerians stake their money in the banks. Elementary economics differentiates management from shareholders. Owners of a limited liability company are the ordinary shareholders. If there is a problem of capital, it is the shareholders who reserve the right to recapitalise such companies. If shareholders of the rescued banks were given the right of first refusal to recapitalise and they failed, no single person would have raised issues with the CBN. What the CBN is doing is to discourage the spirit of entrepreneurship in the financial service sector, that is discourage local initiatives in banking and finance.
Even the proposed sale of the banks is in trouble as some of those picked as core investors have not the resources to recapitalise them. Some of the groups are going around those whom the banks were taken from to ask for funding. That being the case, why the smokescreen approach? A direct request for shareholders to step in and raise fresh funds for the affected banks is neater and more transparent than the present backdoor method if there is nothing more to it than meets the eyes.
While it is true that the law made provisions for the protection of depositors, it is also morally true that someone has to take the risk of using his resources to set up a bank before depositors can put their money into it. The CBN governor’s idea that shareholders have lost their deposit led several to go to court. The shareholders of the rescued banks are engaged in one litigation or the other against the CBN’s decision. If Nigeria were a country where there is respect for rule of law, it would have amounted to contempt of court for the CBN and its principal officers to continue with the sale of the banks.
The curious thing is that the rescued banks have a combined deposit of N3.06 trillion which is a source of worry to the CBN management that should the eight banks go under, the economy will not be able to absorb the loss nor is the Federal Government in any position to pay depositors. The Nigeria Deposit Insurance Corporation has provision for protecting small depositors and can only pay a maximum of N250,000 per depositor.
The letter which one of the rescued banks treasurer wrote to staffers of the bank with the subject Interbank/CBN dependence on bank funding draws attention to the need to look further for an alternative to the CBN path to resolving the crisis. The letter alluded to “the escalating level of the bank’s interbank/CBN dependence for funding operations, and the urgent need to tackle the situation with a multi-pronged solution.” The letter written by the bank’s treasurer on March 16, 2011 stated: “As at mid month, interbank takings stand at N133 billion and this does not include CBN SLF (Standing lending facility) of N35 billion.”
The bank’s treasurer listed issues facing the bank to include, persistent negative clearing, loss of deposits and the fact that “70 per cent (N187 billion) of total treasury assets (N246 billion) is held for now in an illiquid AMCON Bond.” The fact that banks are still taking facility from the CBN which is similar to the expanded discount window and the mere fact that banks are complaining that AMCON bonds are illiquid go to show that the banking sector crisis is far from being resolved.
The second issue against the banks then was that they were too flamboyant as typified by the lifestyle most exhibited. More so, a good number of them were taking awards from all comers and flashing same as a marketing tool. Why all that has stopped at individual bank level, the CBN and its Governor are inundating the nation on the pages of newspapers and the electronic media with the plethora of awards the Governor has garnered across the globe. The question is: For what purpose are the awards, especially coming from those who know next to nothing of what is happening in the economy, who base their judgement on what they hear and are not privy to facts on ground?
Many Bank Managing Directors in their private homes and discussions mule over the issue asking the difference between what the bankers were accused of and what both the CBN governor and his appointed managing directors are doing in the banks. In all of the pretences going on in the economy, Nigerians are the ones suffering the pain. Key economic indicators which are the primary responsibility of the CBN are in the red.
For instance, while employment is projected to rise, the manufacturing sector is being anticipated to remain unchanged in 2011. Inflation which should be the primary focus of the CBN is generally expected to rise; interest rate is also expected to rise further; the naira exchange rate is projected to depreciate further in the months ahead. Also input cost is expected to rise in 2011.
The CBN itself has identified the following pressure points and policy challenges: persisting fluctuations in the interbank call and OBB rates; tight credit conditions and high lending rates; depreciating naira exchange rate in the face of declining stock of external reserves.
As it stands, the CBN has run out of ideas on how to resolve the banking crisis. All it should have done in the first instance was to ask the shareholders of these banks within a given time frame to recapitalise even if those indicted for wrong doings were excluded from the exercise. The right of first refusal if given to the shareholders would have stood the CBN out as fair and just. The failure to apply this principle under the guise that banking licence is a privilege, has prolonged the resolution of the crisis. With the lesson from Savannah Bank licence revocation still fresh in the minds of Nigerians and the subsequent victory of the shareholders in court, it will be good and better for all Nigerians to sink their differences in this matter and hold a stakeholders meeting to agree on the formulae for the recapitalisation of the rescued banks. The US and most parts of Europe have resolved their financial crisis and moved on to other things while we are still here talking tough and pursuing imaginary enemies. The economy and the future of the younger generation are more important than any single individual no matter how highly placed.
Finance
Afreximbank successfully closed its second Samurai Bond transactions, raising JPY 81.8bn or $527m
African Export-Import Bank said it has successfully closed its second Samurai bond transaction, securing a total of JPY 81.8 billion (approx. USD 527 million) through Regular and Retail Samurai Bonds offerings.
The execution surpasses the Bank’s 2024 debut issuance size, attracting orders from more than 100 institutional and retail investors, marking a renewed demonstration of strong Japanese investor confidence in the Bank’s credit and its growing presence in the yen capital markets.
On 18 November, Afreximbank priced a JPY 45.8 billion 3-year tranche in the Regular Samurai market following a comprehensive sequence of investor engagement activities leveraging Tokyo International Conference on African Development (TICAD9), including Non-Deal Roadshows (NDRs) in Tokyo, Kanazawa, Kyoto, Shiga and Osaka, a Global Investor Call, and a two-day soft-sounding process which tested investor appetite across 2.5-, 3-, 5-, 7-, and 10-year maturities.
With market expectations of a Bank of Japan interest rate increase, investor demand concentrated in shorter tenors, resulting in a focused 3-year tranche during official marketing.
The tranche attracted strong participation from asset managers (22.3%), life insurers (15.3%), regional corporates, and high-net-worth investors (39.7%).
Concurrently, Afreximbank priced its second Retail Samurai bond on 18 November, a JPY 36.0 billion 3-year tranche, more than double the inaugural JPY 14.1 billion Retail Samurai issuance completed in November 2024.
The 2025 Retail Samurai bond also marks the first Retail Samurai bond issued in Japan in 2025.
Following the amendment to Afreximbank’s shelf registration on 7 November 2025, SMBC Nikko conducted an extensive seven-business-day demand survey through its nationwide branch network, followed by a six-business-day bond offering period.
The offering benefited from strong visibility supported by Afreximbank’s investor engagement across the country, including the Bank’s participation at TICAD9, where Afreximbank hosted the Africa Finance Seminar to introduce Multinational Development Bank’s mandate in Africa and its credit profile to key Japanese institutional investors.
MBC Nikko Securities Inc. acted as Sole Lead Manager and Bookrunner for both the Regular and Retail Samurai transactions. Chandi Mwenebungu, Afreximbank’s Managing Director, Treasury & Markets and Group Treasurer, commented:
“We are pleased with the successful completion of our second Samurai bond transactions, which marked a significant increase from our inaugural Retail Samurai bond in 2024, and which reflect the growing depth of our relationship with Japanese investors.
The strong demand, both in the Regular and Retail offerings, demonstrates sustained confidence in Afreximbank’s credit and mandate.
We remain committed to deepening our engagement in the Samurai market through regular investor activities and continued collaboration with our Japanese partners.”
Ecobank Nigeria, a member of Africa’s leading pan-African banking group, has announced the launch of the Ecobank SME Bazaar—a two-weekend festive marketplace designed to celebrate local creativity, empower entrepreneurs, and give Lagos residents a premium shopping experience this Detty December. The Bazaar will hold on 29–30 November and 6–7 December at the Ecobank Pan African Centre (EPAC), Ozumba Mbadiwe Road, Victoria Island, Lagos. Speaking ahead of the event, Omoboye Odu, Head of SMEs, Ecobank Nigeria, reaffirmed the bank’s commitment to supporting small and medium-sized businesses, describing them as the heartbeat of Nigeria’s economy. She explained that the Ecobank SME Bazaar was created to enhance visibility for entrepreneurs, expand market access, and support sustainable business growth.
According to her, “This isn’t just a market—it’s a vibrant hub of culture, commerce, and connection. From fresh farm produce to trendy fashion, handcrafted pieces, lifestyle products, and delicious food and drinks, the Ecobank SME Bazaar promises an unforgettable experience for both shoppers and participating SMEs. Whether you’re shopping for festive gifts, hunting for unique finds, or soaking in the Detty December energy, this is the place to be.” Ms. Odu added that participating businesses will enjoy increased brand exposure, deeper customer engagement, and meaningful networking opportunities—making the Bazaar a strong platform for both festive-season sales and long-term business growth. The event is powered by Ecobank in partnership with TKD Farms, Eko Marche, Leyyow, and other SME-focused organisations committed to building sustainable enterprises.
The Central Bank of Nigeria (CBN) has said that16 banks have so far met the new capital requirements for their various licences, some four months before the March 31, 2026 deadline. The apex bank also indicated that 27 other banks have raised capital through various methods in one of the most extensive financial sector reforms since 2004. Addressing journalists at the end of the Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Mr Olayemi Cardoso said the banking recapitalisation was going on orderly, consistent with the regulator’s expectations. He said, “We are monitoring developments, and indications show the process is moving in the right direction.” Nigeria has 44 deposit-taking banks, including seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.
Cardoso explained that eight commercial banks had met the N500 billion capital requirement as of July 22, 2024, rising to 14 by September of the same year. The number has now increased to 16 as the industry continues to race toward full compliance. He said that the reforms would reinforce the resilience of Nigerian banks both within the country and across the continent. “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” Cardoso said. According to him, the reforms would strengthen the financial sector’s capability to support households and businesses. He said, “Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. “It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalisation.”
He added that the apex bank considered several factors in determining the new capital thresholds, including prevailing macroeconomic conditions, stress test results and the need for stronger risk buffers. He reassured on the regulator’s commitment to strict oversight as the consolidation progresses. “We will rigorously enforce our ‘fit and proper’ criteria for prospective new shareholders, senior management, and board members of banks, and proactively monitor the integrity of financial statements, adequacy of financial resources, and fair valuation of banks’ post-merger balance sheets,” Cardoso said. He said the CBN remained confident that the banking system would emerge stronger at the conclusion of the recapitalization exercise, with institutions better prepared to support Nigeria’s economic transformation Banks have up till March 31, 2026 to beef up their minimum capital base to the new standard set by the apex bank. Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds.
While most banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition. The CBN had in March 2024 released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion. Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026. Under the guidelines for the recapitalisation exercise, banks are expected to subject their new equity funds to capital verification before the clearance of the allotment proposal and release of the funds to the bank for onwards completion of the offer process and addition of the new capital to its capital base. The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation exercise.
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