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Major Banks May Halt Dividends Till 2028
Access Holdings Plc, Zenith Bank Plc, and First Bank Holdings may suspend dividend payments until 2028, as Nigeria’s top banks confront regulatory pressure to rebuild capital buffers to fully provide for legacy forbearance exposures, according to a new report by Renaissance Capital.
The report, released June 16, follows a directive by the Central Bank of Nigeria (CBN) on June 13, which instructed banks to pause dividends, defer executive bonuses, and halt offshore expansion until they’ve adequately provisioned for forbearance loans and resolved breaches of single obligor limits.
Renaissance analysts say the order could result in a multi-year dividend drought for some of the country’s largest lenders.
“Our base case is that the banking arms of AccessCorp, ZenithBank, and FirstHoldco will not resume dividend payments before 2028,” the note said. “Most of their near-term cash flows will be directed towards absorbing provisioning costs and recapitalisation.”
Although these lenders reported strong accounting profits in 2024 — N635 billion for Access and N867 billion for Zenith — both posted negative cash profits, largely due to unrealised interest income on Stage 2 loans and FX revaluation gains.
FirstHoldco’s cash position also turned negative in Q1 2025, following challenges with a single large non-performing loan.
GTCO, by contrast, fully provisioned its exposures earlier and is expected to maintain uninterrupted dividend payments, supported by positive cash profits of N1.2 trillion in FY24.
UBA is also expected to resume payouts by 2026, given its manageable exposure and steady liquidity.
According to the report, six lenders hold a combined forbearance exposure of $3.5 billion with Zenith Bank being the most exposed.
“We estimate regulatory forbearance exposures at $304 million, $887 million, $134 million, $296 million, $282 million, and $1.6 billion for ACCESSCORP, FIRSTHOLDCO, FCMB, FIDELITYBK, UBA, and ZENITHBANK, respectively,” the report shows.
The dividend suspension comes amid additional strain from the CBN’s move to raise the Cash Reserve Ratio (CRR) to 50 percent, which Renaissance estimates cost the banking sector N840 billion in income last year alone.
With just 20 percent of customer deposits left deployable for lending, analysts warn the capital build-up may not translate into real credit growth.
“The 50% CRR regime is proving more detrimental to banks’ profitability and liquidity,” the analysts said in the report.
”From an operational perspective, a CRR reduction would enhance banking sector liquidity, reduce reliance on commercial paper issuance for liquidity management, and improve overall financial system efficiency.”
Businessday.ng
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BREAKING: Court Sentences Nnamdi Kanu To Life Imprisonment
Justice James Omotosho of the Federal High Court, Abuja, has sentenced the leader of the Indigenous People of Biafra (IPOB), Mazi Nnamdi Kanu.
Naija News reports that Justice had earlier convicted Kanu on all seven counts levelled against him by the Federal Government.
The judge sentenced Kanu to life imprisonment for count 1, 2, 4,5, and 6.
He also sentenced Kanu to 20 years forcount 3 without option of fine.
The Judge sentenced Kanu to five years in prison on count seven without option of fine.
Justice Omotosho ruled that he should not be kept in Kuje prison. He forfeited Nnamdi Kanu’s radio transmitter and barred him from access to social media.
More are still coming
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Just In: FG Urges Court To Impose Death Sentence On Nnamdi Kanu
The Federal Government has urged the Federal High Court in Abuja to impose the death sentence on the detained leader of the proscribed Indigenous People of Biafra (IPOB), Nnamdi Kanu, following his conviction on all seven terrorism counts.
The request was made on Thursday by the FG’s lead counsel, Chief Adegboyega Awomolo (SAN), shortly after Justice James Omotosho found Kanu guilty of all charges preferred against him.
Awomolo, addressing the court after the verdict, argued that the severity of Kanu’s actions merited the maximum penalty under the law.
The senior lawyer insisted that Kanu committed “many illegalities” and should not be treated with leniency.
Awomolo further reminded the court that four of the seven counts on which Kanu was convicted carry the death sentence under Nigeria’s terrorism laws.
He urged Justice Omotosho to take this into account in determining the appropriate punishment.
“It will not be considered justice that he is isolated and punished lightly in a country where we have Boko Haram, ISWAP, Lakurawa, et cetera,” he argued.
According to the prosecution, Kanu’s actions were as destabilising as those of other violent groups and should be treated with equal seriousness.
Awomolo also urged the judge to ensure that Kanu is kept in a secure correctional facility pending the court’s final pronouncement on sentencing.
He stressed the need to prevent any disruptions or security breaches involving the IPOB leader while the sentencing process is underway.
Kanu was earlier found guilty of inciting violence, ordering attacks on security personnel, calling for killings, and issuing threats capable of terrorising the public, all captured in broadcasts tendered as evidence by the prosecution.
News
Court Finally Delivers Judgement In Nnamdi Kanu’s Terrorism Case
Justice James Omotosho of the Federal High Court, Abuja, has delivered his ruling in the case between the detained leader of the Indigenous People of Biafra (IPOB), Nnamdi Kanu, and the Federal Government.
Naija News reports that the judgement was given in Nnamdi Kanu’s absence after the judge had ordered security operatives to kick him out of the court over his unruly behaviour.
Nnamdi Kanu had earlier stated that the Federal High Court sitting in Abuja does not have the jurisdiction to try him.
The separatist, who has been in custody since 2021, faced seven terrorism-related charges bordering on alleged incitement, running an unlawful group, and acts threatening national security.
The IPOB leader contended that the Terrorism Prevention and Prohibition Act, under which he is being prosecuted, has been repealed.
He urged the court to strike out the charges, describing them as “disclosing no offence known to law” and therefore invalid.
Kanu also requested that the court nullify the “purported plea of not guilty” entered on his behalf, claiming it was obtained through deception and contrary to a Supreme Court ruling.
He further asked the court to set aside all subsequent proceedings and order his immediate release.
“My contention is very simple: this court lacks jurisdiction to try me,” he said.
Delivering ruling on Thursday, Justice Omotosho ruled that the court has the authority to preside over the Nnamdi Kanu case.
The judge also stated that the matter of extradition has been settled by the Supreme Court, and he ruled against Kanu in this regard.
On the issue of fairness in the hearing for Nnmadi Kanu, Omotosho ruled against the IPOB leader, stating that the court ensured he received a fair hearing.
On the defendant not entering his defence, Justice Omotosho said: “I begged the defendant passionately to enter his defence, but he remained obsolete. That shows that he chose to rest his case on the prosecution. Which is a gamble and a risky action.”
The court found Nnamdi Kanu guilty and convicted him of count 1 in the charges filed against him by the federal government.
The Judge said: “The court will rely on the uncontroverted evidence of the prosecution. This court, therefore, finds that the prosecution has discharged Count 1 beyond reasonable doubt. Consequently, the defendant (Kanu) is hereby convicted in respect of Count 1.”
More judgement is being read and this report will be updated as it comes in…….
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News1 day agoCourt Finally Delivers Judgement In Nnamdi Kanu’s Terrorism Case
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News1 day agoBREAKING: Court Sentences Nnamdi Kanu To Life Imprisonment
