The Central Bank of Nigeria (CBN) has issued a definitive clarification on how banks and financial holding companies (HoldCos) must compute their minimum paid-up capital, ending weeks of regulatory uncertainty that contributed to delays in the release of some lenders’ financial results.
In a circular dated November 14, 2025, the apex bank ruled that minimum paid-up capital as referenced in 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 issuance.
The directive takes immediate effect and supersedes all previous interpretations.
CBN Moves to End Divergent Capital Calculations
In the circular, addressed to all financial holding companies, the CBN noted that inconsistent interpretations of what qualifies as paid-up capital had emerged across the industry.
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To standardize reporting, the regulator stated:
“Minimum paid-up capital shall be the aggregate of the par value of issued shares and any share premium arising from their issuance. All financial holding companies must apply this definition in computing their minimum capital requirement, including those of their subsidiaries, without exception.”
The CBN added that all conflicting interpretations “should be discontinued forthwith.”
Regulatory Confusion Delayed Bank Earnings
The clarification was prompted by growing discrepancies during regulatory reviews, as some institutions counted only issued share capital, while others included reserves or retained earnings in their capital computations.
This lack of alignment reportedly caused friction during the approval process for lenders’ half-year and nine-month earnings, with some banks asked to reconcile their capital positions before their results could be cleared.
Implications for HoldCos: Dividend, Restructuring at Stake
The directive carries significant implications for HoldCos, which are required to maintain issued share capital higher than the combined capital of all their subsidiaries.
Under the clarified definition, HoldCos that relied on reserves to meet capital thresholds may now need to adjust their structures. This could potentially affect:
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Dividend payouts
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Upstreaming of profits
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Group restructuring plans
Policy Clarity Comes Amid Recapitalisation Drive
The circular lands as Nigerian banks work toward new recapitalisation requirements set by the CBN, which mandate substantial capital increases over the next two years.
Analysts say the clarified definition reinforces the CBN’s consolidated supervision framework by ensuring that HoldCo capital reflects actual shareholder contributions not accounting reserves.
FUGAZ Banks Update Share Capital Positions
Based on the clarified computation method, the largest banking groups (FUGAZ) have the following recognised paid-up capital as of September 2025:
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First HoldCo: N20.94bn share capital + N377.10bn premium = N398.04bn
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UBA: N20.52bn + N329.56bn = N350.08bn
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GTCO: N18.21bn + N489.37bn = N507.58bn
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Access Holdings: N26.66bn + N568.24bn = N594.90bn
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Zenith Bank: N20.54bn + N594.11bn = N614.65bn (highest among peers)
What Comes Next
Banks and HoldCos are now expected to recalculate and update their capital positions in line with the new guidance ahead of upcoming filings. Industry sources indicate that additional guidelines may follow as the recapitalisation roadmap progresses.
Analysts say the clarification will help streamline capital reporting, reduce regulatory disputes, and accelerate pending disclosures across the sector.
