Nigeria’s Banks Recapitalisation

Nigeria’s banking sector is approaching a critical milestone as the Central Bank of Nigeria (CBN)’s landmark bank recapitalisation programme enters its final phase, with the March 31, 2026 deadline drawing closer. Introduced to strengthen financial stability and expand the sector’s capacity to support economic growth, the exercise has already reshaped the country’s financial landscape. PolicyThe recapitalisation initiative was formally launched by the CBN in March 2024, marking the most significant overhaul of banks’ capital requirements in over a decade. Under the new framework, deposit money banks were mandated to significantly raise their minimum paid-in capital depending on their licence category: ₦500 billion for banks with international authorisation ₦200 billion for national banks ₦50 billion for regional banks Separate thresholds were also established for merchant banks and non-interest banks. According to the apex bank, the policy aims to enhance the resilience of the financial system, reduce systemic risk, improve banks’ capacity to finance large-ticket projects, and position Nigerian banks to compete more effectively on the global stage. Progress and Compliance LevelsAs of January 2026, industry data indicate strong progress across the sector. Reports show that more than half of Nigeria’s licensed banks have already met or exceeded their required capital thresholds ahead of the deadline. Tier-1 lenders such as Access Bank, Zenith Bank, United Bank for Africa (UBA), First Bank, GTCO, and Fidelity Bank have successfully completed capital-raising programmes through a combination of rights issues, public offers, private placements, and retained earnings. Collectively, banks have raised over ₦5 trillion since the start of the recapitalisation exercise. Market analysts note that the strong compliance rate among leading banks has helped stabilise investor confidence, with banking stocks recording notable gains throughout 2025. Pressure on Smaller Banks and Consolidation RisksWhile large banks have largely cleared the hurdle, mid-tier and smaller lenders continue to face pressure as the deadline approaches. Some banks are reportedly still finalising capital-raising plans, while others are exploring mergers and acquisitions as a strategic route to compliance. Industry experts warn that failure to meet the new requirements could lead to forced consolidation, licence downgrades, or regulatory intervention. As a result, the coming months are expected to witness heightened merger activity within the sector. Challenges Facing the SectorDespite the progress recorded, the recapitalisation drive has not been without challenges. High cash reserve requirements, tight liquidity conditions, and rising operational costs have complicated fundraising efforts, particularly for smaller banks. Additionally, analysts caution that mergers, while effective in boosting capital, carry integration risks, including system compatibility, asset quality concerns, and cultural alignment issues. Expected Impact on the EconomyEconomists and financial analysts broadly agree that the recapitalisation programme will have a positive medium- to long-term impact on Nigeria’s economy. Better-capitalised banks are expected to: Increase credit availability to businesses and households Support infrastructure financing and large-scale investments Improve financial system stability Enhance Nigeria’s attractiveness to foreign investors Some analysts project improved loan growth and profitability across the banking sector in 2026, provided macroeconomic conditions remain supportive. OutlookWith just weeks to the deadline, Nigeria’s bank recapitalisation exercise is entering its decisive phase. While most major banks are already compliant, the fate of a few smaller players remains uncertain. Nonetheless, the programme is widely regarded as a critical step toward building a stronger, more resilient, and globally competitive Nigerian banking sector.