BRIEF: CBN issues warning to banks on systemic risks

BRIEF: CBN issues warning to banks on systemic risks

The stress in the Nigerian banking sector seems to be posing some imminent risks. The Central Bank of Nigeria (CBN) has warned commercial banks to guard against emerging risks in the financial system.

The apex bank said the financial sector’s resilience appears to be receding.

The CBN said in a statement that the ongoing interest rate normalisation in some advanced economies, which has resulted to reversal of capital flows, has been a concern to policy makers in Nigeria.

Earlier today, global credit rating agency, S&P Global Ratings said it has lowered its long- and short-term issuer credit ratings on Nigeria-based Diamond Bank Plc. to ‘CCC+/C’ from ‘B-/B’.

S&P said it also gave a negative outlook to the bank’s credit rating.

In addition, the rating agency said it also lowered its long- and short-term Nigeria national scale ratings on the bank to ‘ngBB-/ngB’ from ‘ngBBB-/ngA-3.

Diamond Bank is a seciond tier lender in Africa’s largest economy that is struggling to get its capital adequacy levels within regulatory limits.

There were unconfirmed reports that the bank ‘received an offer for an investment that would boost its capital adequacy ratio’. Diamond Bank has not confirmed nor deny the report.