Connect with us

Business

Citibank, StanChart face daunting task to meet minimum capital requirement

Published

on

The recent announcement from the Central Bank of Nigeria (CBN) indicating a new round of bank recapitalization has significant implications for foreign-owned banks operating in Nigeria, including US-owned Citibank and UK-owned Standard Chartered Bank.

The CBN announced an increase in the capital base for commercial banks with international authorization to N500 billion and national banks to N200 billion.

This move is part of the country’s efforts to bolster its banking sector in line with the ambitious goal of achieving a $1 trillion Gross Domestic Product (GDP) by 2030​​​​.

For Citibank and Standard Chartered, the recapitalization drive means a potential requirement to substantially increase their share capital and share premium.

Sources indicate that the banks are currently assessing their options, taking into consideration the trajectory of the Nigerian economy and whether the required capital raise justifies their continued operations in the country.

This recapitalization is in response to the developmental role banks are expected to play, which includes supporting Nigeria’s growth trajectory and ensuring that they can sustainably contribute to the envisioned $1 trillion economy​​.

Optics: Investor confidence in Nigerian banks has been high, as evidenced by significant growth in the NGX banking index and the sector’s performance, even amidst a challenging economic climate​​.

Trending