The apex bank, Central Bank of Nigeria (CBN), has issued new
guidelines to all banks including Deposit Money Banks (DMBs) and
Discount Houses (DHs), on internal capital generation and dividend
pay-out ratio. The new guidelines, issued via a circular (the
Circular) referenced BSD/DIR/GEN/LAB/11/002 and dated 31 January
2018, becomes effective immediately.
Under the new guidelines, banks are now required to ensure that
their composite risk rating (CRR), minimum capital adequacy ratio
(CAR) and non-performing loan (NPL) ratio are within the prescribed
thresholds set out by CBN before dividend can be paid out to
shareholders.
Major highlights of the Circular are presented below.
