Nigerian Stock Market Recovers as Leading Banks Clarify Compliance with CBN Forbearance Directive

The Nigerian equities market rebounded strongly on renewed investor confidence following public reassurances from key banking institutions regarding their compliance with the Central Bank of Nigeria’s (CBN) regulatory forbearance framework.

Leading financial institutions including Zenith Bank, Access Holdings, FCMB Group, and Fidelity Bank issued official statements ahead of trading on Tuesday, outlining progress made in aligning with the apex bank’s prudential guidelines. The proactive disclosures helped restore market stability after a week of volatility triggered by the CBN’s tightened oversight on banks’ capital adequacy and exposure limits.

At the close of trading, several banking stocks posted impressive gains:

• Zenith Bank Plc surged by 5.32%, closing at ₦48.50 per share.

• UBA appreciated by 5.59% to ₦34.00 per share.

• Access Holdings rose 4.49% to ₦20.95.

• Fidelity Bank increased by 1.92%, ending at ₦18.55.

• GTCO climbed 4.43% to ₦79.00, while Stanbic IBTC inched up by 0.63% to ₦80.50.

Regulatory Clarifications and Market Response

Investor confidence had faltered earlier in the week amid concerns over the new CBN directive suspending dividend payments for banks with outstanding forbearance-related loans or breaches of the Single Obligor Limit (SOL). However, clarity from leading banks about their respective compliance roadmaps sparked positive sentiment and a renewed rally on the Nigerian Exchange (NGX).

In a statement filed with the NGX, Access Holdings revealed that its subsidiary, Access Bank Plc, was the first bank to meet and exceed the CBN’s ₦500 billion minimum capital requirement for international banks. It also confirmed current compliance with the SOL requirement and reaffirmed its commitment to exiting all regulatory forbearance arrangements by June 30, 2025.

“We remain committed to delivering long-term value for our shareholders and stakeholders, while maintaining strong capital buffers and compliance with regulatory directives,” said Sunday Ekwochi, Company Secretary of Access Holdings.

Similarly, Zenith Bank disclosed that its forbearance exposure is limited to a single obligor, and that full compliance is expected by June 2025. The bank has already made significant provisions and expressed readiness to return to full adherence with all prudential regulations.

FCMB: Forbearance Exposure Reduced by Over 60%

FCMB Group also provided detailed insights, reporting a significant decline in its forbearance-linked credit exposure from ₦538.8 billion in September 2024 to ₦207.6 billion as of May 31, 2025 — a reduction of over 60%. The loans pertain to three entities and two obligors, currently classified as Stage 2 under IFRS 9, with expectations to transition the exposure out of forbearance by year-end.

The Group also addressed a SOL-related exposure to one obligor, noting that this would be brought within regulatory limits by September 30, 2025, following the equity conversion of a ₦23.1 billion convertible loan. FCMB has already secured CBN capital verification and is processing other required approvals.

Fidelity Bank: Capital Raising Strategy on Track

Fidelity Bank Plc emphasized its strategic efforts to strengthen its capital base and reduce forbearance-linked risks. The bank recently raised ₦273 billion through a public offer and rights issue, both of which were oversubscribed. Plans are underway to raise an additional ₦200 billion via private placement in 2025, having already secured approvals from the CBN and shareholders.

The bank’s SOL exposure involves two obligors, and its broader forbearance covers four customers. Fidelity confirmed substantial provisioning has been made, with targeted actions in place to ensure full recovery or reclassification of affected accounts by June 30, 2025.

“We are fully committed to adhering to all regulatory frameworks designed to promote soundness and prudence in the financial system,” the bank stated.