November 25, (THEWILL) — The Central Bank of Nigeria (CBN) has issued a fresh directive clarifying how Financial Holding Companies and banks should compute their minimum paid-up capital.
This follows weeks of uncertainty that contributed to delays in the release of some lenders’ half-year and nine-month earnings.
In a circular dated November 14, 2025, the apex bank ruled that the minimum paid-up capital referenced under Section 7.1 of the 2014 Guidelines for Licencing and Regulation of Financial Holding Companies must be computed strictly as the par value of issued shares plus any share premium arising from issuance.
“The Central Bank of Nigeria (CBN) has noted divergent interpretations of the term minimum paid-up capital as referenced in Section 7.1 of the Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria 2014 (the Guidelines).
To ensure consistency and strict adherence, this clarification is hereby issued.
‘’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. Please be guided accordingly.’’
Industry experts emphasise that the circular was prompted by divergent interpretations within the industry.
Some banks and HoldCos treated minimum capital as paid-up capital, excluding share premium, while others included reserves and retained earnings, resulting in inconsistent capital computations across the sector.
The lack of clarity created friction during ongoing regulatory reviews, especially as banks prepared their audited and unaudited earnings.
In several cases, institutions were asked to reconcile their capital positions before submitting results for approval, contributing to delayed filings.
Sources also indicated that HoldCos were a key focus of the clarification. Under existing rules, a HoldCo is expected to maintain greater issued share capital than the combined capital of all its subsidiaries
Failure to meet this requirement can affect dividend approvals, group restructuring plans, and upstreaming of profits.
The CBN’s latest position, insisting that only issued share capital and share premium count toward minimum capital, means HoldCos that previously relied on reserves or retained earnings to meet the threshold may now need to adjust their structures.
“This directive takes immediate effect, and all previous interpretations that conflict with this position should be discontinued forthwith”, the circular stated.
The clarification comes as banks continue to work toward the CBN’s new recapitalisation regime, which requires lenders to significantly boost their capital bases over the next two years.
With new thresholds now in motion, regulators are seeking uniform definitions to avoid inconsistencies in capital reporting.
The updated interpretation also strengthens the CBN’s consolidated supervision model, ensuring that capital at the HoldCo level reflects actual shareholder contributions.
With the new directive now in force, banks and HoldCos are expected to revalidate their capital calculations and reflect the updated definition in upcoming filings.
it is believed that additional capital guidance may follow as part of the broader recapitalisation framework.
The CBN’s push for clarity is expected to streamline capital reporting, reduce regulatory disputes, and accelerate delayed financial disclosures across the banking sector.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
