The Association of Securities Dealing Houses of Nigeria (ASHON) expresses concern over the Central Bank of Nigeria’s (CBN’s) recent circular temporarily suspending dividend payments by banks.
This directive, issued on June 13, 2025, according to the apex bank, aims to ensure compliance with regulatory forbearance and Single Obligor Limit (SOL) requirements.
However, ASHON believes the timing of this directive is inopportune, given the ongoing efforts by banks to meet the increased minimum capital requirement which is regulatory-induced . The announcement of this price-sensitive information has caused shock and dismay due to its potential impact on shareholders and the stock market.
According to the Chairman ASHON, the indefinite suspension may erode investor confidence in the banking sector, potentially triggering a sell-off of bank shares on the Nigeria Exchange Limited (NGX), where the sector dominates daily transactions.
He suggested that the CBN could have managed this situation more discreetly to avoid speculation and market volatility.
“Unless an alternative solution is found, this directive may hinder banks’ capital-raising efforts, particularly those yet to commence their capital raise before the deadline,” he said.
ASHON Chairman reassures investors that the CBN’s directive to temporarily suspend dividend payments by banks should not cause undue panic. Our banks have strong fundamentals and potential for growth.
“We advise investors to consult certified stockbrokers for informed guidance during this period, ” he said.
The circular, dated June 13, 2025, has introduced a fresh wave of uncertainty at a time when Nigerian banks are already navigating complex capital raising efforts to meet the apex bank’s recapitalisation mandate.
Under the directive, banks currently benefiting from regulatory forbearance—particularly those granted concessions on credit exposures and breaches of the Single Obligor Limit (SOL)—are now restricted from distributing dividends to shareholders, deferring bonuses to directors and senior management, and investing in foreign subsidiaries or offshore ventures.
According to the CBN, these measures are necessary to strengthen capital buffers, reinforce balance sheet resilience, and encourage the internal retention of capital amid ongoing macroeconomic reforms.
However, the policy does not specify which institutions are affected, nor does it provide a timeline for compliance, raising questions about its immediate impact and long-term implications for investor confidence and banking sector stability.
