After weeks of anxiety across Nigeria’s financial sector, the Central Bank of Nigeria has stepped in with a decisive clarification on how banks and Financial Holding Companies must calculate their minimum paid-up capital — a move aimed at ending regulatory disputes that had stalled the release of half-year and nine-month financial statements.
In a circular dated November 14, 2025, the CBN ruled that the minimum paid-up capital referenced under Section 7.1 of the 2014 Guidelines for Licensing and Regulation of Financial Holding Companies must be calculated strictly as the par value of issued shares plus any share premium arising from their issuance. The clarification overrides all previous interpretations and takes immediate effect.
The order closes a messy chapter of conflicting internal readings that had split the industry. Some institutions treated minimum capital as strictly paid-up share capital, others added share premiums, and a few even counted reserves or retained earnings — creating discrepancies that frustrated ongoing regulatory reviews.
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The circular, signed by the Director of Senior Secondary Education, Hajia Abdulkadir, on behalf of the Minister, stated: “For the purpose of Section 7.1 of the Guidelines, minimum paid-up capital shall be the aggregate of the par value of issued shares and any share premium arising from their issuance. Accordingly, all Financial Holding Companies are required to apply this definition in computing their minimum capital requirement, including those of their subsidiaries, without exception. This directive takes immediate effect, and all previous interpretations that conflict with this position should be discontinued forthwith.”
The dispute over what constitutes minimum capital had grown into a stumbling block during regulatory reviews, according to people with inside knowledge of the matter. Some banks and HoldCos were instructed to reconcile their capital positions before submitting results, delaying approvals of their audited and unaudited earnings.
The confusion arrived at a sensitive moment. With recapitalization deadlines approaching, banks were under pressure to show clean, compliant capital structures. Instead, many found themselves trapped in back-and-forth sessions with examiners, slowing down disclosures and freezing planned communications with investors.
HoldCos in the Spotlight
The directive carries major implications for HoldCos, which were a particular focus of the CBN’s clarification. Under existing rules, a HoldCo must maintain higher issued share capital than the combined capital positions of all its regulated subsidiaries.
In the past, some groups relied on retained earnings or reserves to meet this threshold. The CBN has now wiped that option off the table.
This means several HoldCos may need to adjust their capital structures, halt or reconsider dividend payouts, or rework restructuring plans. Upstreaming of profits — a sensitive point in an era of tight liquidity — may also face new constraints.
The timing of the clarification coincides with the banking sector’s most ambitious recapitalization programme since 2004. New thresholds are already in motion, and regulators want uniformity in how banks report capital to avoid loopholes or creative accounting.
By insisting that only issued shares and share premium count, the CBN is reinforcing its consolidated supervision model. It wants capital to reflect real shareholder contributions — not accumulated profits or accounting reserves that could fluctuate.
What the Numbers Show: FUGAZ Capital Positions Under the New Rule
The strongest banking groups — the FUGAZ banks — hold sizeable capital bases once share premiums are consolidated into the computation.
- First HoldCo: N20.94bn share capital + N377.10bn premium = N398.04bn
- UBA: N20.52bn share capital + N329.56bn premium = N350.08bn
- GTCO: N18.21bn share capital + N489.37bn premium = N507.58bn
- Access Holdings: N26.66bn share capital + N568.24bn premium = N594.90bn
- Zenith Bank: N20.54bn share capital + N594.11bn premium = N614.65bn — the largest among the five.
These figures reveal how heavily Nigerian banks have come to rely on share premiums — a product of past capital raises — as buffers in their capital structures.
What This Means
With the new directive now in force, banks and HoldCos are expected to revalidate their capital computations ahead of upcoming filings. Sources say more guidance may follow under the broader recapitalization framework, especially as the CBN moves to streamline capital reporting templates.
The CBN, by this move, aims to reduce regulatory friction, clear the backlog of delayed earnings releases, and ensure a level playing field as banks prepare for the next phase of capital expansion. The new directive means that ambiguity has been removed from the sector, uniform capital reporting has been introduced, and the recapitalization timeline is not slowing down.