The Central Bank of Nigeria (CBN) says the banking industry’s capital adequacy ratio (CAR) fell to 12.0% in July 2025 following the withdrawal of regulatory forbearance earlier granted to banks. The decline of 1.43 percentage points from June, the CBN said in its monthly economic report, reflects the end of temporary relief measures that had softened the impact of recent macroeconomic shocks on bank balance sheets.
CAR—an indicator of banks’ ability to absorb losses remains above the 10.0% regulatory minimum, the report noted, signaling that the sector still has a buffer against credit and market risks. At the same time the liquidity ratio strengthened to 62.86%, well above the 30.0% prudential floor, pointing to robust short‑term solvency and capacity to meet maturing obligations.
However, asset‑quality pressures persisted: the non‑performing loan (NPL) ratio rose by 2.17 percentage points to 7.80%, above the 5.0% prudential limit. The CBN said overall asset quality was “broadly stable,” attributing containment of contagion risks to enhanced supervisory vigilance and risk‑based regulatory interventions.
In summary, while the withdrawal of forbearance trimmed capital buffers, the CBN judged the banking sector to be broadly stable, with strong liquidity and supervisory measures helping to preserve systemic stability.
