Banking
Investors Reject CBN Directive on Dividend Payment by Banks, Threaten Lawsuit
By Dipo Olowookere
Shareholders in the nation’s capital market have condemned recent directive by the Central bank of Nigeria (CBN), to Deposit Money Banks (DMB), not to pay dividend on its shares until all its expenses have been completely written off, saying the decision is a disincentive to investors; promising to challenge this in court if necessary, Guardian Newspaper is reporting.
The shareholders, who argued that the market is information-driven, said with the little signs of recovery and capital appreciation witnessed recently, government at all levels must be cautious, and avoid any actions and decisions that could send wrong signals, and erode investors’ confidence in the market.
According to them, expectations are that the relatively low interest rates in the money market, and sell-off in the bond market will boost inflow into the stock market, as fund managers play earnings season for quick returns in high dividend paying stocks.
The shareholders however argued that the decision by the apex regulator on dividend payout would definitely erode the optimism and confidence on huge investment inflow into the equity market, which has trailed it since the beginning of the year.
Furthermore, they added that there are possibilities of some hasty sell-off reactions by investors especially in stocks that are affected by the dividend payment restrictions.
Specifically, the President, Proactive Shareholders Association of Nigeria, Taiwo Oderinde, in an interview with The Guardian, said: “CBN is only interested in protecting the banks’ depositors at the expense of the shareholders. Every bank has its own board that has the prerogative to decide to pay dividend.”
“It is not CBN’s responsibility to decide when or when not to pay dividend to their investors. It is an anti-investors policy and directive, and we will challenge it in court,” he said.
Also speaking, the Publicity Secretary of Independence Shareholder Association, Moses Igbrude, described the CBN directive to banks with huge non-performing loans not to pay dividend to shareholders as most unfortunate, noting that the decision would have negative effects on the market.
“Why would CBN wait until the loans go bad before issuing now, who are these borrowers, what has CBN done to those serials borrowers, who take loans from one bank to the other without paying? What sanctions or punishment have they imposed on them, why are they afraid of them?
“We, shareholders, are not happy about this directive, and it is going to affect us seriously in this harsh economic period. Though we are going to question and ask bank managements at the AGMs who are these people owing the banks, the regulator should address the issue of non-performing loan in all its form by sanctioning the borrowers, and the givers of the loans before punishing the shareholders.”
The President, Progressive Shareholders Association, Boniface Okezie, said the CBN has failed to do what is expected of it as an apex financial regulator abnitio.
“Where was the CBN when the banks’ non-performing loans hit the roofs? CBN should not pass the buck to the investing public, my advice to CBN is that they must reverse this policy; it is not going to help the Investors at all.
“They should allow the banks that have made a lot of recovery from their bad loans whose shareholders’ funds are strong to be allowed to go ahead to pay dividends to their shareholders. If any bank has weak capitals, it should not contemplate paying any dividend whatsoever, and those banks must be given marching orders to go after the defaulters to pay back their loans with the assistants of CBN.”
The Co-Founder, Nigeria Shareholders Solidarity Association (NSSA), Gbadebo Olatokumbo, described the decision as a bomb shell, saying it is contrary to investors’ expectations of huge dividend payout in the current financial year.
He pointed out that the managements and directors of any bank that fails to pay dividend to shareholders must be held accountable.
He added that any bank that failed the dividend-payment test, should not pay emoluments to their directors, while the management should lose their bonuses and welfares, and be responsible for the payment on any sanction from the apex bank forthwith.
“Really, it was a bomb-shell to the expectations of shareholders on returns on investments, but CBN has a job to do, and it must be done effectively.
“We will have to hold the managements and directors of our banks liable, if they were unable to pay dividend. The committee of bank that approved those unpaid loans should have questions to answer, while insider defaulters, who are the managements and directors, must be made to face the music.”
CBN had released an update on an earlier circular issued October 8, 2014, on, “Internal Capital Generation and Dividend Pay-out Ratio of Nigerian Banks.”
The major focus of the circular is on the capital reserves of the banks as well as the proportion of non-performing loans in a bid to forestall any threats to customer deposits in the system.
Source: The Guardian
By Adedapo Adesanya
The Nigeria Deposit Insurance Corporation (NDIC) says it has paid the insured deposits of about 700,000 customers of the defunct Heritage Bank and has commenced the reimbursement of depositors of 46 microfinance banks (MFBs) whose operating licences were recently revoked by the Central Bank of Nigeria (CBN).
The chief executive of NDIC, Mr Oludare Sunday, made this known on Wednesday during a retreat for members of the House of Representatives Committee on Insurance and Actuarial Matters in Lagos.
He said the corporation immediately began settling the insured deposits of customers after the CBN revoked the licences of the 46 microfinance banks and appointed the NDIC as their provisional liquidator.
“We are working on those. The CBN revoked the licences, and we were appointed as the provisional liquidator. We have started paying depositors of those banks, and gradually we intend to cover all the insured depositors,” he said.
Mr Sunday explained that the NDIC’s responsibility extends beyond paying insured deposits to recovering outstanding loans owed to the failed institutions and disposing of their assets to generate funds for the settlement of uninsured depositors.
“Our function as liquidator involves the payment of guaranteed sums. Thereafter, we go after those who owe the institutions and have not paid. We also ensure that we sell the available assets and realise their investments towards paying the uninsured portion of the deposits. So, we have started paying the guaranteed deposits. What we are doing now is also realising the assets of those institutions,” he stated.
Although he declined to disclose the exact number of depositors of the failed microfinance banks who had been reimbursed, Sunday said the Corporation was working with the Nigerian Interbank Settlement System (NIBSS) to identify depositors through their Bank Verification Numbers (BVN) to ensure seamless payments.
“So, the more accounts we discover, the more payments we make,” he added.
Providing an update on the liquidation of Heritage Bank, the NDIC chief said about 700,000 depositors had already received their insured deposits, while efforts were ongoing to trace other customers whose identities could not be verified from available records.
He attributed the challenge to legacy accounts created before the introduction of the BVN system, as well as incomplete customer records inherited from banks that were later merged into Heritage Bank.
“If you know Heritage Bank, you know it is an amalgamation of several banks, including the acquisition of Enterprise Bank in 2014. So, if you think of banks like Guardian Express and Spring Bank, they are all part of Heritage Bank.
“There are depositors we have not been able to trace, and this is an opportunity for them to come forward. I am sure many of us did the National Youth Service Corps (NYSC) and may have left some money in an account, but there was no BVN then.
“Even the addresses we had were sometimes things like ‘opposite filling station.’ How do you trace such a person? Once they come forward, and for those we have been able to identify from the institution’s database, we have been paying them,” he explained.
Mr Sunday added that the Corporation would continue to recover outstanding loans and dispose of Heritage Bank’s assets to generate funds for the payment of liquidation dividends to depositors whose balances exceeded the insured limit.
Earlier in his remarks, he described the NDIC as a critical pillar of Nigeria’s financial safety net, stressing the need for stronger collaboration between regulators and the National Assembly as the banking sector responds to recapitalisation efforts and rapid financial technology developments.
According to him, while the ongoing banking recapitalisation programme has strengthened the resilience of financial institutions, it must be complemented by sound corporate governance, effective risk management, strict regulatory compliance and robust supervision to safeguard long-term financial system stability.
He also disclosed that more than 98 per cent of depositors, representing over 281 million accounts across insured financial institutions, are fully protected under the NDIC’s deposit insurance scheme.
By Adedapo Adesanya
Zenith Bank Plc is investigating an incident involving unauthorised access to customers’ data, noting that the breach does not involve financial information and has not compromised its banking services or digital channels.
In an email sent to customers on Wednesday, the bank stated that the incident was part of a broader global cyberattack affecting multiple international organisations across various sectors.
The lender stated that it immediately activated its incident response protocols and intensified its cybersecurity and remediation efforts upon discovering the incident.
“This incident is part of a broader, global cyber-attack targeting multiple international organisations across various sectors. Upon discovery, we promptly activated our incident response protocols, cybersecurity actions and remediation efforts,” the bank said.
The bank reassured customers that its banking services and digital channels remain secure and fully operational.
As a precautionary measure, Zenith Bank advised customers to remain alert to potential phishing attempts and other forms of social engineering.
“As a precaution, we encourage our customers to remain vigilant against phishing emails, text messages, or phone calls, and never to disclose their password, PIN, One-Time Password (OTP), or other security credentials to anyone,” the bank said.
The incident is the latest in a series of cybersecurity challenges facing Nigerian financial institutions, with banks in recent months suspending their social media operations over impersonation and other fraudulent activities.
Earlier in April, the Nigeria Data Protection Commission (NDPC) said it was investigating alleged data breaches involving Sterling Bank, Remita and the Corporate Affairs Commission (CAC).
Nigerian banks have long been prime targets for cybercriminals because of the vast amounts of customer data and financial transactions they handle every day.
While many attacks have traditionally sought to steal funds, cybercriminals are increasingly targeting personal information, which can be used for identity theft, phishing schemes, account takeovers and other forms of financial fraud.
Cybersecurity threats have increasingly targeted Nigerian banks in recent years. In 2025, Union Bank of Nigeria warned customers about fraudulent websites and phishing campaigns designed to steal login credentials and personal information by impersonating the bank.
In August 2024, Guaranty Trust Bank experienced a domain-related security incident that temporarily disrupted access to its official website, although the lender assured customers that their deposits and banking services remained secure while it resolved the issue.
By Adedapo Adesanya
The chairman of First HoldCo Plc, Mr Femi Otedola, has affirmed plans to increase his 26 per cent holding in the organisation to 51 per cent, confirming a planned takeover of Nigeria’s oldest banking institution.
Mr Otedola spoke in an exclusive interview with Nairametrics published on Monday, giving a rare direction following recent speculations about the financial institution.
The milestone followed a series of share acquisitions, as Mr Otedola sought to tighten his grip as the company’s largest shareholder following the recent acquisition of additional shares worth N222.21 billion.
In the interview, the mogul said he has invested more than N600 billion of his personal wealth in First HoldCo, describing the move as a “long-term generational commitment” rather than another turnaround investment he would eventually exit.
Responding to speculation that he intends to consolidate his position in the group, Mr Otedola hinted that his investment journey is far from over.
“My investment threshold is always over and above 51 per cent,” he said. “One of my key investment principles is that firm shareholder control, with due regard for minority interest, is a key ingredient to executing reforms and restructuring to deliver value to all stakeholders.”
The businessman said the same strategy had guided his investments in African Petroleum Plc, later renamed Forte Oil Plc, where he gradually increased his shareholding from 28 per cent to 75 per cent before exiting the company in 2019.
He said he also increased his stake in Geregu Power Plc from 51 per cent to 95 per cent before reducing it to 77 per cent after the company’s public listing.
“I am on the same trajectory with First HoldCo Plc,” Mr Otedola said.
“To date, I have invested over N600 billion of my personal wealth in First HoldCo Plc — a figure that speaks not to speculation, but to unflinching confidence in the institution’s future, fundamentals and an unwavering personal commitment to its success.”
Mr Otedola said his decision to invest in First HoldCo came at a time when the institution was facing one of the most challenging periods in its history.
The billionaire steadily increased his investment in the group, accelerating his share purchases in 2026. His stake grew from 6.68 billion shares (15.95 per cent) in June 2025 to 8.06 billion shares by March 2026, then to 9.28 billion shares by June after acquiring about 1.22 billion shares in one quarter. A further purchase through Calvados Global Services last month lifted his holdings above 10 billion shares for the first time.
