The Central Bank of Nigeria (CBN) has warned banks against excessive risk-taking, emphasizing the need for stronger corporate governance, internal controls, and risk management. Deputy Governor, Corporate Services, Dr. Muhammad Sani Abdullahi, gave the warning at the 38th Seminar for Finance Correspondents and Business Editors in Abuja. He stressed that boards and management teams must demonstrate integrity, accountability, and transparency to protect depositors, investors, and other stakeholders.
Abdullahi highlighted the importance of extending risk management beyond credit risk to cover market, liquidity, operational risks, cybersecurity, third-party dependencies, and climate-related financial risks. The CBN will continue to focus on risk-based supervision, macroprudential surveillance, and enhanced stress testing, alongside consumer protection, fintech regulation, and crisis preparedness. This approach aims to ensure the stability of the financial system and protect customer data.
The banking sector recapitalisation exercise has seen 33 banks meet the revised minimum capital requirements, raising N4.65 trillion under the two-year programme. However, Abdullahi noted that success should not be measured solely by the amount of capital raised, but by the quality of banking services and productive lending it supports. Banks are urged to deploy stronger balance sheets to finance key sectors such as agriculture, manufacturing, and infrastructure.
To achieve Nigeria's ambition of building a $1 trillion economy by 2030, banks must be capable of mobilising and allocating capital on a larger scale. Stronger capital buffers will enable banks to finance long-term infrastructure, support industrial expansion, and facilitate international trade. Abdullahi also emphasised the need for banks to prepare for emerging risks from geopolitical uncertainty, climate change, and rapid technological developments.
The CBN deputy governor stressed that the benefits of recapitalisation should extend to underserved groups, including rural communities, women, and young entrepreneurs, through greater financial inclusion. Consumer protection and financial inclusion are integral to resilience, as a system that people can access, understand, and trust is better able to support lasting growth.
Earlier, Director, Corporate Communications and Investor Relations Department, Mickeal Chukwuemeka, noted that the completion of the recapitalisation exercise had shifted focus from raising capital to how banks deploy additional funds. He urged financial correspondents and business editors to provide context needed for Nigerians to understand monetary policy and financial sector reforms through accurate reporting.
The CBN will remain vigilant in supervising banks in the post-recapitalisation era, ensuring that stronger balance sheets are matched by sound governance, responsible lending, and effective risk management. The apex bank's supervisory approach will continue to evolve to address emerging risks and promote a robust and resilient financial system.
Key points
- CBN warns banks against excessive risk-taking, urging stronger corporate governance and risk management.
- 33 banks have met revised minimum capital requirements, raising N4.65 trillion under the two-year recapitalisation programme.
- Banks must deploy stronger balance sheets to finance key sectors and support Nigeria's $1 trillion economy ambition.
