Nigeria’s top eight commercial lenders would be required to raise a combined total of N1.575 trillion to enable them to meet the new minimum capital requirement as stipulated by the Central Bank of Nigeria (CBN).
The CBN released a new minimum capital requirement for banks on Thursday, among which the regulator stipulates N500 billion for banks with international authorisation.
Fidelity Bank, Access Bank, GTBank, First Bank, United Bank for Africa, Union Bank, Zenith Bank, and FCMB all fall into the category of banks expected to jerk up their minimum capital to N500 billion.
As of the date of the issuance of the regulatory circular on minimum capital requirements, the eight banks came short of the new stipulation.
For instance, Zenith Bank currently has N270.75 billion in share capital and would need to inject an additional N229.25 billion to meet the new CBN requirement.
Access Bank currently has N251.81 billion and would need N248.19 billion to meet the new regulatory requirements. First Bank currently has N251.34 billion in share capital and needs to plug the N248.66 billion gap.
Others are Union Bank, which currently has N148.09 billion and needs N351.91 billion in new capital; GTBank, which has N138.19 billion and would need N361.81 billion; and Fidelity Bank, which has N29.71 billion and would have to inject fresh N370.30 billion in new capital.
FCMB has N125.29 billion currently and would need to raise an additional N374.71 billion in fresh capital, while the United Bank of Africa (UBA) has N115.82 billion currently and would need a new injection of N384.19 billion in new capital.
Prior to the announcement by the CBN, Access Holding Plc notified Nigerian Exchange Limited of its plans to seek a shareholders’ vote next month for approval to launch a capital raising program of $1.5 billion via a share sale or bond offering, it said in a notice ahead of the vote.
However, from the look of things, it appears many banks would have to seek business combinations through merger and acquisition to enable the scale the hurdle of the new capital requirement by the regulatory bank.
Many banks at their current capital base would require huge funds to plug the huge gap between their present share capital and the regulatory requirement and the possibility of their shareholders being able to muster the resources is suspect.
