The Central Bank of Nigeria has warned lenders against taking on excessive risk following the completion of the banking sector recapitalization program, urging a stronger focus on governance and long-term value.
Speaking at an industry conference, Blaise Ijebor, the Chief Risk Officer of the bank, noted that higher capital levels alone do not ensure stability, thereby emphasizing the need for good governance and disciplined lending to maintain growth.
The warning follows 33 banks reaching new capital requirements, which generated about N4.65 trillion over two years in an effort to enhance resilience and bring Nigeria’s financial system in line with worldwide standards.
The News Chronicle understands that stronger capital buffers might entice banks to pursue aggressive lending or riskier investments, thereby exposing the economy to future shocks if not handled appropriately, and increasing regulators’ concern.
Highlighting key pressure points, including balance sheet risks, poor credit policies, and operational challenges, Ijebor urged boards to strengthen oversight and ensure capital is used to support sustainable returns.
He also urged greater roles for risk and compliance groups in guiding strategic direction.
The apex bank claims that discipline will define the drive’s long-term performance, especially as banks negotiate a challenging economic environment, even if the recapitalization push has increased investor confidence and raised industry-wide capital adequacy.
