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CBN-GUIDANCE-SUMMARY -ON-CAPITAL-ADEQUACY -COMPUTATION.pdf

CBN-GUIDANCE-SUMMARY-ON-CAPITAL-ADEQUACY-COMPUTATION.pdf

Preview of CBN-GUIDANCE-SUMMARY -ON-CAPITAL-ADEQUACY -COMPUTATION

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📊 Size: 346 KB

👤 Author: Dolapo Ogunbayo

⬇️ Downloads: 505

Summary

Banks in Nigeria must maintain a minimum regulatory capital adequacy ratio (CAR) of 10% and 15% for Systemically Important Banks (SIBs). The CAR is calculated as Qualifying Capital (Tier 1 + Tier 2 - Deductions) divided by Total Risk-Weighted Assets (RWA). Tier 1 capital includes paid-up share capital, irredeemable preference shares, and general reserves, while Tier 2 capital includes hybrid capital instruments, revaluation surplus, and subordinated debt. Deductions from capital include goodwill, intangibles, and deferred tax assets. SIBs must maintain a minimum CAR of 15%, with Tier 2 capital not exceeding 25% of qualifying capital, and must also set aside an additional 1% capital surcharge. They are subject to enhanced supervision, including quarterly stress tests and monthly monitoring of key performance indicators. Banks must submit annual Internal Capital Adequacy Assessment Process (ICAAP) reports, while SIBs must make quarterly disclosures of their financial condition and risk management activities.

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Description

Banks in Nigeria must maintain a minimum regulatory capital adequacy ratio (CAR) of 10% and 15% for Systemically Important Banks (SIBs).

Technical Information

File Format: PDF
File Size: 346 KB
Pages: 3
Language: EN
Author: Dolapo Ogunbayo
Total Downloads: 505
Last Updated: 3 weeks ago

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