Custodian Investment Plc recorded a sharp rise in regulatory penalties in its 2025 financial year, paying a total of N419.13 million to the Central Bank of Nigeria (CBN) and other regulatory agencies, up from N19.17 million in 2024, according to the company’s audited financial statements filed on the Nigerian Exchange (NGX).
Notes to the financial statements show that the bulk of the fines, approximately N391 million, were levied by the CBN.
The largest component was a N240 million penalty for breaching the intraday liquidity facility (ILF) on a CBN bond trade. The ILF is a short-term funding mechanism allowing financial institutions to settle time-sensitive transactions within the same day, with repayment required by business close.
Other regulatory penalties included:N76 million for non-compliance with Customer Due Diligence (CDD) regulations; N75 million for failing to implement internal audit corrections for a misclassified high-risk customer; N5 million for environmental fee violations (NESREA); N1.5 million for delayed Securities and Exchange Commission (SEC) filing on an infrastructure fund; N10 million for late submission of Financial Reporting Council of Nigeria (FRCN) returns N9.93 million related to Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT) supervision issues; N1.7 million for delayed NGX financial statement filing.
The company clarified that the N240 million ILF-related fine, linked to transactions conducted on behalf of Sterling Bank Plc, has been fully recovered from the counterparty, mitigating the net financial impact.
Despite the fines, Custodian Investment posted a strong performance, with profit before tax rising to N77.35 billion and net income at N91.32 billion. Analysts noted that the fines represent less than 1% of pre-tax profit and, after adjusting for the ILF recovery, the actual financial burden is even smaller relative to management expenses and overall earnings.
Financial compliance expert Dr. Funke Olayinka noted, “While Custodian Investment’s recovery of the ILF fine reduces the immediate financial burden, the increase in regulatory penalties signals potential lapses in internal controls and compliance processes. Firms need to strengthen oversight to prevent repeated infractions.”
Banking analyst Chidi Nwosu added, “The fines, though material, are dwarfed by the company’s earnings. Custodian Investment’s robust net income demonstrates resilience and strong operational performance, but recurrent penalties could affect stakeholder confidence if not addressed.”
The development highlights the balancing act for financial institutions: maintaining strong profitability while ensuring strict adherence to regulatory frameworks in an increasingly complex compliance environment.
