Fidelity bank moves to exit CBN Forbearance by June

Fidelity Bank has announced plans to fully comply with regulatory requirements regarding its forbearance exposure by the first half of 2025.

In a corporate disclosure submitted to the Nigerian Exchange Limited on Wednesday night, the bank clarified that its forbearance under the Single Obligor Limit involves just two obligors.

Additionally, the bank noted that its broader credit forbearance exposure is limited to four customers in total.

This move comes in response to a recent directive issued by the Central Bank of Nigeria (CBN) on June 13.

The circular restricts banks with unresolved forbearance issues from declaring dividends, granting executive bonuses, or investing in foreign subsidiaries.

The directive specifically targets institutions whose regulatory forbearance relates to breaches in Single Obligor Limits and other credit exposures.

Other major financial institutions, including Zenith Bank, Access Holdings, and FCMB Group, have also issued public assurances that they intend to comply with the CBN’s timeline. Fidelity Bank now joins the list of lenders moving swiftly to align with the apex bank’s regulatory expectations.

Fidelity Bank, which expressed a commitment to comply with regulatory directives, said, “The Bank’s exposure under the SOL forbearance relates to two obligors. We are confident that this exposure will be brought within the applicable regulatory limit in H1 2025.

“With respect to the forbearance granted on other credit facilities, the bank confirms that this applies to four customers. We have proactively made substantial provisions on these facilities and have taken targeted and comprehensive steps to ensure full provisioning or return of the accounts to performing status by June 30, 2025.”

The lender added that it expects to exit all CBN forbearance arrangements (SOL/Credit) and remains in a strong position to meet the prevailing requirements to enable it to pay dividends for the current financial year and subsequently.

Ahead of the recapitalisation deadline of the CBN in 2026, the bank successfully raised N273bn through a recent Public Offer and Rights Issue, which were oversubscribed by 237.92 per cent and 137.73 per cent, respectively.

It intends to raise the additional sum of N200bn through a Private Placement this year to achieve the new minimum regulatory capital requirement of N500bn for banks with international authorisation.

Fidelity Bank said that it has received approval from the regulator and its shareholders for the Private Placement, while other regulatory approvals are being processed to ensure completion in 2025.