First HoldCo says 2025 dividend will be paid despite CBN’s forbearance regime

First HoldCo says it will sustain its dividend payments in 2025 despite its forbearance exposure and single obligor limits (SOL) breach.

On June 14, the CBN announced time-bound prudential measures for banks still under regulatory forbearance as part of its broader recapitalisation programme set to conclude by March 31, 2026.

The CBN directed banks to temporarily suspend dividend payments to shareholders, bonuses to directors and senior management staff.

The financial institutions were also asked to halt investments in foreign subsidiaries or new offshore ventures to enhance capital buffers and provisioning adequacy for their forbearance exposure and SOL.

On June 17, Renaissance Capital named First HoldCo as one of six banks affected by the CBN directive.

In a corporate disclosure filed on the Nigerian Exchange (NGX), signed by Adewale Arogundade, First HoldCo’s company secretary, the firm said it plans to exit the CBN’s regulatory forbearance regime by completing its capital raise in the second half of 2025.

As a “well-diversified” financial holding company, First HoldCo said it will “sustain its dividend payments in 2025 and beyond as we remain committed to our esteemed stakeholders.”

“The SOL breach of our primary subsidiary, First Bank of Nigeria Ltd (“FirstBank” or “the Bank”), is related to two customers with foreign currency loans arising from over 200% currency devaluation in 2023/2024,” the statement reads.

“With the planned completion of the capital raise in the second half of 2025 among other measures, the Bank will cure the breach in this regard.

“Furthermore, the Bank’s forborne loans are in respect of syndicated facilities that are industry exposures.”

First HoldCo said the consortium of lenders is working to “re-tenor the facilities” to match their cash flows as the assets “are back to active production and generating appreciable revenue.”

“Some also have receivables awaiting payment from relevant agencies of government. Syndicate lenders will ensure the processes are concluded within the current financial year,” the bank said.

According to First HoldCo, any loan not fully re-tenored will be fully provisioned and exit forbearance.