The Central Bank of Nigeria (CBN) has cautioned commercial banks against engaging in excessive risk-taking following the conclusion of the country’s banking sector recapitalisation exercise. The regulator warned that stronger capital positions must not be misused, stressing the need for disciplined governance and long-term value creation across the industry.
Speaking through the Director of Risk Management and Chief Risk Officer, Dr. Blaise Ijebor, at a virtual risk management roundtable organised by the Association of Enterprise Risk Management Professionals (AERMP), the Central Bank of Nigeria emphasized that capital strength alone is not enough to guarantee financial stability. He noted that “capital builds strength, but governance sustains it,” warning that weak oversight and poor lending practices have historically triggered banking crises.
The recapitalisation programme, recently completed across Nigeria’s banking sector, saw 33 banks meet new minimum capital requirements by the March 31, 2026 deadline. The exercise raised about N4.65 trillion over 24 months, with capital adequacy ratios now exceeding Basel standards. Notably, domestic investors contributed 72.55% of the total funds raised, reflecting strong local confidence in the financial system.
Ijebor highlighted key risk areas banks must now manage more carefully, including balance sheet vulnerabilities, operational risks, governance gaps, and anti-money laundering and counter-terrorism financing concerns. He also stressed the importance of improved stress testing, accurate asset valuation, and stronger board-level oversight as banks adjust to their new capital realities.
He concluded that the success of the recapitalisation drive will depend on how well banks integrate risk management into strategic decision-making. According to him, the next phase of growth in the banking sector must prioritize discipline, transparency, and strong governance to ensure long-term stability and resilience.
source: nairametrics