Nigerias c-bank warns local banks against recapitalising African units.

By bne IntelliNews May 31, 2012
Nigerias central bank of has warned local commercial banks with presence in other African countries against using funds from the parent institutions in Nigeria to meet higher capitalisation requirements for foreign subsidiaries, THISDAY reported. The move is aimed at protecting Nigerian banks from reducing their reserves, as this could have a negative effect on their capital adequacy ratio. The central bank directed Nigerian banks to recapitalise their African subsidiaries through funds raised from the countries in which they operate. Nigerian banks with presence abroad include United Bank for Africa (UBA) with 18 subsidiaries on the continent, Access Bank with eight subsidiaries, Guaranty Trust Bank with five, Skye Bank with four, Keystone Bank with four and Diamond Bank and Zenith Bank with three foreign subsidiaries each. Zambia and Ghana have raised their minimum capital requirements for banks, aiming to mobilise additional resources for their economies and enable banks participate effectively in the national economic growth as well as provide more funds for lending. Ghanas central bank has raised its minimum capital requirement for all banks to GHS 60mn (EUR 25.6mn) from GHC 10mn, while Zambias regulator has boosted its minimum capital requirements for foreign commercial banks to ZMK 520bn (EUR 79mn) from ZMK 12bn, while the minimum capital requirements for local lenders was raised to ZMK 104bn.
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