•As shareholders demand swift resolution
Zenith Bank Plc has assured shareholders and investors of its readiness to satisfy all relevant conditions to exit the Central Bank of Nigeria’s (CBN) regulatory forbearance by June 30, 2025.
The bank also expressed confidence in meeting shareholders’ dividend expectations in the 2025 financial year. The clarification comes on the back of heightened scrutiny of Nigerian banks’ capital health following the new CBN directive that suspends dividend payments and tightens oversight for banks with outstanding forbearance-related loans or breaches of the Single Obligor Limit (SOL).
In a statement presented to the Nigeria Exchange (NGX) Group on Tuesday, the bank stated that its exposure under the Single Obligor Limit (SOL) forbearance relates solely to a single obligor, pointing out that this exposure will be brought within the applicable regulatory limit on or before June 30, 2025.
The bank also confirmed that the forbearance granted on other credit facilities applies to only two of its customers, noting that it has made substantial provisions in respect of these facilities and taken appropriate and comprehensive steps to ensure full provisioning by June 30, 2025.
The bank further emphasised its strong financial footing, stating that it has successfully raised and surpassed the new regulatory capital requirement of N500 Billion, and is therefore well positioned to continue delivering value to all its key stakeholders.
Zenith Bank has continued to distinguish itself in the Nigerian financial services industry through superior service offerings, unique customer experience and sound financial indices.
The bank has remained a clear leader in the digital space with several firsts in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions.
Meanwhile, shareholders have emphasised the urgent need for the CBN and the affected commercial banks to collaborate and devise a clear exit strategy from the current forbearance obligations to resume dividend payments to investors.
While acknowledging the immediate concerns posed by the suspension of dividends, particularly its negative effect on investor returns and stock prices, the shareholders expressed optimism that the long-term advantages would outweigh the temporary setbacks.
President of the New Dimension Shareholders Association of Nigeria, Patrick Ajudua, expressed deep concern for shareholders following the CBN’s directive.
He noted that the announcement has created uncertainty, particularly because it temporarily halts both interim and final dividend payments, which are crucial to retail investors in an economy marked by uncertainty and declining purchasing power.
However, he also acknowledged the rationale behind the CBN’s decision, stressing that despite the short-term pains the policy could ultimately prove beneficial.
Ajudua expressed confidence that the temporary suspension could strengthen the capital base and attract genuine investment to the affected banks. He emphasised that the measure impacts only a small number of institutions and is expected to enhance the overall resilience and stability of the banking sector.
Also, he noted that it would foster greater transparency in provisioning and support prudent internal capital retention throughout the transitional phase.
He urged the CBN and affected banks to urgently develop a clear, time-bound framework for exiting the forbearance policy in a way that prioritises the interests of shareholders, enabling a prompt resumption of dividend payments.
President of the Independent Shareholders Association of Nigeria, Moses Igbrude emphasised that while forbearance is a regulatory requirement, it must be implemented in a manner that does not disrupt or indefinitely delay dividend payments.
He stated: “The directive must be carefully managed by the boards and management of banks. The initial goal of the CBN in introducing this policy was to stabilize the sector and prevent disruptions, and that intention was appreciated by investors and the broader Nigerian public.”
Igbrude warned that the process of rolling back the forbearance should not be perceived as a punitive action or a sanction, instead, it should be approached with transparency and cooperation among all stakeholders to avoid destabilising the market and to maintain the stability that the policy was originally intended to safeguard.
Meanwhile, the Association of Securities Dealing Houses of Nigeria (ASHON) expressed concern over the timing of the CBN’s directive. According to the association, the policy was announced when banks were under significant pressure to meet new minimum capital requirements set by the same regulatory body.
