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CBN Says Nigerian Banks Remain Resilient Amid Rumours of Failing CAR

photos of Nigerian Banks

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has assured stakeholders in the country that Nigerian banks remain resilient following widespread media reports that commercial banks in the country had failed the bank’s Capital Adequacy Ratio (CAR) for international authorisation.

CAR compares the risk-weighted assets of a bank with the available capital that Nigerian banks possess. For instance, when faced with challenging financial conditions, the ratio offers a quick and easy way to determine whether or not a bank has sufficient money to cover losses and continue to keep its solvent status.

In a statement on Monday, the apex bank, through its Acting Director of Corporate Communications, Mrs Hakama Sidi Ali, said that the country’s banks remained steadfast, as financial soundness indicators were within the regulatory thresholds as captured in the CBN’s most recent Economic Report of 2023.

“The attention of the Central Bank of Nigeria (CBN) has been drawn to reports in some media outlets suggesting that some licensed commercial banks in the country had failed the CBN’s Capital Adequacy Ratio (CAR) for international authorisation,” the statement seen by Business Post said.

“We wish to clarify that the Nigerian banking industry remains resilient as key financial soundness indicators were within the regulatory thresholds as captured in the CBN’s most recent Economic Report of 2023,” it added.

The bank added that it was engaging with various critical stakeholders to sustain the level of confidence in the Nigerian financial sector, adding “We, therefore, appeal to Nigerians to disregard the media reports listing banks as failing the Capital Adequacy Ratio (CAR) stress test for international authorisation as the report did not emanate from the Central Bank of Nigeria (CBN).”

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