Shareholders Urge Banks to Exit Forbearance

Shareholders of different banks have appealed to financial institutions to redouble their efforts toward exiting the Central Bank of Nigeria (CBN’s) regulatory forbearance.
Forbearance is implemented by a government or regulatory agency to temporarily suspend some regulations to provide relief to businesses or banks facing financial difficulties and unable to repay their loans under certain terms and conditions.
National Coordinator, Pragmatic Shareholders Association, Mrs Bisi Bakare, said in Abuja yesterday that the timing for the directive was inappropriate.
Bakare said the CBN’s directive had cut short the expectations of shareholders on receipt of dividend and capital appreciation on their investment in the banks.
She recalled that the same CBN mandated the banks to raise capital and most investors responded by increasing their shares.
”This was done with expectation of getting dividend but this directive will truncate such desires.
”We note that the timing is not adequate as you cannot shift a goal post when the match is on.
”Hence much as we acknowledge the benefit of this circular which is to ensure a strong capital base for the banks and to strengthen their resilience and stability, we believe that effort must be made by affected banks to exit the forbearance.
”The banks need to exit this and position themselves for dividend payment to their respective shareholders,” she said.
The National Coordinator, Independent Shareholders Association of Nigeria, Mr Moses Igbrude, stressed the need for the directive to be managed by the Boards and management of banks in a way that dividends payment would not be disrupted.
According to him, the CBN’s initial forbearance extension was intended to maintain stability and prevent disruption, which has been appreciated by investors and Nigerians alike.
”When rolling back this directive, it is crucial to structure and manage the transition carefully with all stakeholders to avoid instability and maintain the stability that was initially intended.
”Banks involved have come out with various options they intend to exit these forbearances and how the directive will not affect their dividends payment plan.
A shareholder in some of the banks under CBN’s forbearance, Mrs Catherine Omale, lamented that the directive was not in the interest of shareholders.
Omale said that dividend payment by banks was the only thing which she had benefitted from her banks as she was not receiving interests on her savings account.
Meanwhile, some of the banks alleged to be affected by the forbearance said that they could still pay dividends to shareholders.
First HoldCo said it was committed to paying dividend in the 2025 financial year and beyond in spite of its forbearance exposure.
First HoldCo in a statement filed on the platform of the Nigerian Exchange Limited, said that due to its diversified financial holding Company, it would sustain its dividend payments in 2025 and beyond.
Reports said that banks suspected to be under regulatory forbearance include Access, First HoldCo, Zenith, Fidelity, First City Monument Bank (FCMB) and United Bank for Africa (UBA Plc). (NAN)