CBN lifts cap on banks’ additional Tier-1 capital till March 31, 2026

The Central Bank of Nigeria (CBN) has temporarily lifted regulatory caps on the recognition of Additional Tier 1 (AT1) capital in the computation of banks’ Capital Adequacy Ratio (CAR).

This measure, which is aimed at reinforcing capital buffers in the banking sector, takes effect from June 30, 2025, will remain in force until March 31, 2026.

The decision was communicated through a regulatory notice signed by Olubukola A. Akinwunmi, director of Banking Supervision, as part of a broader transition framework to facilitate a credible and orderly exit from the regulatory forbearance regime introduced during the COVID-19 crisis.

The CBN stated that the adjustment is designed to support banks in strengthening their capital positions without compromising long-term capital planning or regulatory integrity.

“The temporary lifting of regulatory caps on AT1 capital recognition is solely for the purpose of supporting capital adequacy and should not be seen as a substitute for the ongoing recapitalisation programme,” the apex bank said. The recapitalisation exercise had earlier been outlined in the CBN’s circular dated March 28, 2024 (Ref: FPR/DIR/PUB/CIR/002/009).

According to the directive, this temporary measure is intended to help banks maintain resilience and absorb potential shocks during the final stages of exiting the pandemic-era concessions. However, the CBN made it clear that the measure does not dilute the minimum capital requirements that banks are expected to meet under the new recapitalisation roadmap.

BusinessDay