CBN’s new foreign branch rule causes $1.92 trillion loss on NGX

### Article rewritten:

**CBN Foreign Subsidiaries Settlement Causes $1.92 Trillion Loss on NGX**

By Taiye Olayemi

Lagos, May 7, 2026 (NAN) – The Nigerian Stock Exchange (NGX) ended Thursday’s session in the red, with investors losing a total of 1.92 trillion naira amid sell-offs in banking and cement stocks. This decline came in reaction to the Central Bank of Nigeria’s (CBN) new regulatory guidelines on foreign branches of Nigerian banks.

The market capitalization fell from N155.780 trillion to N153.858 trillion, marking a decline of 1.23%, or N1.92 trillion. The All-Share Index (ASI) also fell 1.23%, losing 2,994.90 points to close at 239,734.61 from its previous position of 242,729.51.

The year-to-date (YTD) return fell to 54.82%.

Explaining the cause of the decline, Tajudeen Olayinka, an investment banker and stockbroker, attributed the losses to the market’s reaction to the CBN’s new directive. He explained that CBN regulations require banks with foreign operations to limit their investments in foreign branches to only 10% of their equity capital or equity funds.

Olayinka further said that the CBN has also instructed banks that have crossed this limit to start disinvesting from their foreign branches. He noted that the market’s immediate reaction was to interpret this move as the CBN integrating the revenues and reserves of banks with foreign operations into their existing regulatory capital. This, he believes, would reduce banks’ ability to pay dividends or make future payments dependent on their growth trajectories.

He explained that the directive led to a heavy revision in the prices of international banking stocks, which in turn caused a ripple effect, driving down the prices of other major stocks, particularly cement companies.

However, Olayinka described the impact as temporary, stressing that the affected banks remain well capitalized and largely undervalued. He encouraged investors to hold on to their banking stocks, saying the sector’s fundamentals remain strong and that the sector is highly regulated with no liquidity issues.

Despite the overall decline, market breadth closed in the green, with 42 gainers versus 30 losers. CAP and FTN Cocoa Processors led the list of gainers, both up 9.99% to close at N212.50 and N8.04 per share respectively.

On the other hand, Berger Paints, Zichis Agro Allied Industries and Meyer recorded the biggest losses, each declining 9.97% to close at N98.75, N30.33 and N17.10 per share respectively.

University Press led the losers with a decline of 10% to close at N4.50, followed by Red Star Express, which fell 9.59% to N25.45. Skyway Aviation Handling Company also recorded a decline of 8.63% to close at N130.75.

Market activity recorded a recovery, with the total volume traded increasing by 29.34% to 1.83 billion shares, valued at N72.17 billion, traded in 81,131 trades.

NEM Insurance recorded the highest volume traded, with 360.56 million shares, accounting for 19.70% of the total volume. Seplat Energy is the leader in terms of value with N12.98 billion of transactions, accounting for 17.99% of the total value traded.

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The Nigerian Stock Exchange (NGX) lost $1.92 trillion after sell-offs in banking and cement stocks, triggered by the Central Bank of Nigeria’s (CBN) new regulatory guidelines on foreign branches. This market decline reflects the reaction of investors

n changes affecting the operations of Nigerian banks abroad.