By David Akinmola, Abuja
The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has revealed key reasons why several banks in the country failed to meet the minimum forbearance-related requirements, even as the apex bank continues efforts to stabilise and strengthen the financial system.
Cardoso, speaking at a financial sector review in Abuja, disclosed that only eight banks met the necessary benchmarks during the CBN’s recent assessment.
He attributed the failure of others to deep-rooted structural and operational weaknesses within the affected institutions.
According to him, one of the major shortcomings was the lack of effective risk management frameworks. Some banks, he noted, failed to establish robust internal systems capable of monitoring credit risk and evaluating loan performance. This led to a buildup of unreported or poorly managed non-performing loans, creating vulnerabilities within their balance sheets.
He further explained that several banks were excessively exposed to high-risk sectors such as oil and gas, manufacturing, and small and medium-sized enterprises (SMEs). These exposures, he said, were not adequately hedged and lacked credible loan restructuring strategies, leaving the banks more susceptible to sectoral downturns and economic shocks.
Cardoso also pointed to weak corporate governance as a key factor. He cited lapses in board oversight, delayed interventions, and compliance failures as common problems. According to him, ineffective governance often leads to financial misreporting and delays in addressing critical issues, thereby weakening institutional performance.
Another concern raised by the CBN Governor was the inadequate capital buffers of some banks. He said that a number of institutions were operating with capital levels below regulatory thresholds, raising doubts about their ability to absorb shocks or maintain stability without support from the apex bank.
In addition, Cardoso revealed that certain banks had failed to implement previous directives issued by the CBN, especially those relating to transparency in forbearance-related disclosures. This non-compliance, he said, has impaired the regulator’s ability to accurately assess their financial health and apply appropriate supervisory measures.
He emphasized that the CBN remains committed to enforcing regulatory standards and will not hesitate to take appropriate actions against institutions that fall short. The governor urged all banks to strengthen their internal controls, improve transparency, and align with the apex bank’s reform agenda to safeguard the overall health of the financial sector.
The CBN is expected to follow up with stricter oversight and additional policy measures aimed at addressing gaps in risk management and governance, as well as improving the sector’s resilience to future economic pressures.
