By Seun Ibiyemi
The Central Bank of Nigeria (CBN) has issued a new directive defining how Financial Holding Companies (FHCs) and their subsidiary banks must calculate their minimum paid-up capital.
The CBN directive ends weeks of confusion that had stalled the release of several lenders’ financial results for the half-year and nine-month periods.
In a circular issued recently, the apex bank said the minimum paid-up capital outlined in Section 7.1 of the 2014 Guidelines for Licensing and Regulation of Financial Holding Companies should be computed strictly as the par value of issued shares plus the share premium arising from their issuance.
The CBN said the clarification was prompted by “divergent interpretations” across the financial sector, which created inconsistency in capital reporting.
“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,” the circular stated.
The directive, which takes immediate effect, also mandates that all FHCs apply the same computation method when determining the capital requirements of their subsidiaries.
The central bank added that all previous interpretations conflicting with this position must be discontinued, signalling a firm push for compliance and uniform capital reporting within the banking industry.