What It Means As Eight Banks Meet CBN’s Forbearance Requirements

In a major development for Nigeria’s financial system, the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has disclosed that eight Nigerian banks have successfully met the apex bank’s minimum forbearance-related requirements.

This announcement comes at a time when the CBN is intensifying its supervisory oversight and pushing for a stronger, more resilient banking sector that can support the country’s economic transformation agenda.

“We have conducted detailed stress tests and reviewed the risk profiles of banks. As of now, eight banks have met the minimum thresholds for forbearance as established by the CBN,” the Governor said during a policy dialogue in Abuja.

Understanding Forbearance in Nigeria’s Banking Context

Forbearance refers to temporary regulatory relief granted to banks, allowing them to manage distressed assets, credit losses, and capital buffers during challenging macroeconomic periods. This is often used during crises to ensure financial system stability while giving institutions time to recover.

In Nigeria’s case, forbearance policies were introduced to help banks navigate post-pandemic recovery, manage foreign exchange volatility, and withstand rising inflation, all of which have impacted asset quality and capital adequacy ratios.

The CBN’s approach to forbearance has included:

• Allowing the restructuring of non-performing loans (NPLs),
• Offering capital relief for certain loan classifications,
• Granting temporary latitude on provisioning requirements.

Meeting forbearance thresholds signals a bank’s ability to manage risk proactively, maintain adequate capital buffers, and adapt to evolving regulatory demands.

Why This Matters

The CBN’s confirmation is viewed by analysts as a confidence-boosting move for investors, depositors, and international stakeholders. It sends a clear message that despite recent economic headwinds, a segment of Nigeria’s banking sector remains fundamentally sound.

Key implications include:

• Reinforced investor trust in the Nigerian banking system.
• A signal of prudent risk management practices by compliant banks.
• A green light for those banks to participate more actively in future economic interventions and credit expansion.

Moreover, this comes as the CBN continues to push for recapitalisation across all Nigerian banks, with new capital requirements expected to be enforced by 2026. Meeting forbearance thresholds could give these eight banks an early-mover advantage in adapting to this policy shift.

Sector Response and Future Outlook

While the CBN did not name the banks that have met the requirements, industry experts speculate that several Tier-1 banks, known for stronger capital positions and robust risk frameworks, are among the compliant institutions.

In a statement accompanying his remarks, Cardoso emphasized that regulatory support does not imply complacency. The apex bank, he said, will continue to monitor compliance levels and take action against weakly governed banks.

“Meeting forbearance requirements is just the beginning. All banks must work towards full compliance with capital adequacy, asset quality, and liquidity benchmarks as we build a safer, more inclusive financial system,” he said.

The apex bank’s posture reflects a broader regulatory shift, one focused not just on crisis management, but on long-term banking sector transformation, digital integration, and improved financial access for Nigerians.

As Nigeria seeks to deepen its financial sector and improve economic resilience, the CBN’s announcement offers a glimmer of reassurance. Eight banks meeting forbearance requirements marks a critical step in stabilizing the system, even as broader reform efforts continue.

The onus now lies on other financial institutions to strengthen their balance sheets, improve transparency, and prepare for the next phase of Nigeria’s banking evolution.