Nigeria’s largest bank by tier-1 capital, Zenith Bank Plc has moved to calm investor concerns after its shares tumbled nearly 8% in response to a new regulatory directive from the Central Bank of Nigeria (CBN) suspending dividend payments for banks with unresolved forbearance.
The tier-1 lender, in a statement to the Nigerian Exchange dated June 17, 2025, confirmed that it had already surpassed the new capital requirement of $323 million introduced by the CBN in March 2024 and said it expects to resolve all forbearance issues by the end of June, which will enable it resume dividends payment this year.
The clarification comes after Zenith’s share price fell from ₦50.02 ($0.032) to ₦46.05 ($0.030) in just two days, wiping off 7.9% of its market value. The broader banking index on the NGX has dropped 4.17% since the CBN’s June 13 policy announcement.
The new rule blocks affected banks from paying dividends, issuing bonuses to senior management staff, or making new foreign investments.
Zenith is among the banks identified in a Renaissance Capital report as having material exposure to regulatory forbearance.
According to the investment bank, the lender holds the largest exposure, amounting to 23% of its total loan book, translating to about $1.6 billion.
But Zenith, in its filing, assures that it is working to get its exposure under control and within regulatory limits.
“The Bank’s exposure under the SOL forbearance relates solely to a single obligor. We are confident that this exposure will be brought within the applicable regulatory limit on or before 30 June 2025,” it said.
The bank also disclosed that only two other customers are tied to its remaining forbearance-related credit exposures. “With respect to the forbearance granted on other credit facilities, the Bank confirms that this applies only to two customers.”
Zenith added that it had already made substantial provisions for the affected loans and expects full provisioning to be completed within the first half of the year.
“Upon completion, the Bank will no longer be under any forbearance arrangements in this regard. The Bank expects to exit all CBN forbearance arrangements by the end of the first half of 2025,” it noted.
Despite the market reaction, Zenith is optimistic that it will meet all conditions required to resume dividend payments this year.
“We remain confident that the Bank will satisfy all relevant conditions to enable it to pay dividends to shareholders in the current year,” it said.
The CBN introduced the restrictions as part of efforts to unwind post-COVID forbearance frameworks and strengthen financial sector resilience. While several tier-1 lenders, including Zenith, Access Bank, and FirstBank, are affected, the new rules have raised concerns about earnings stability across the sector.
Zenith’s swift clarification appears aimed at reassuring shareholders and stemming further losses as investor sentiment wobbles.
