Forbearance With Strings: Lessons From The CBN's 2025 Conditional Relief To Banks

Introduction

When the Central Bank of Nigeria (CBN) released its June 13, 2025 circular—"Temporary Suspension of Dividend Payments, Bonuses and Investment in Foreign Subsidiaries"—it was not the first time Nigerian banks had seen forbearance linked to strict conditions. But the circular's lasting impact has become clearer over the months since its release, particularly following the June 20, 2025 follow-up circular that set out an explicit exit roadmap from the relief regime.

The CBN circular represents a temporary prudential measure designed to limit profit distribution and offshore expansion by banks currently operating under regulatory forbearance. By directing the suspension of dividends, bonuses, and investments in foreign subsidiaries, the Central Bank aims to preserve internal capital, bolster balance sheet resilience, and ensure that affected institutions prioritise the restoration of sound prudential positions. Ultimately, the directive seeks to