Nigerian banks scramble as recapitalisation deadline looms, experts warn

Nigerian commercial banks are racing against the clock to meet the Central Bank of Nigeria’s (CBN) recapitalisation requirements, with the March 31, 2026, deadline tied to audited 2025 financial results. 

The exercise, launched on April 1, 2024, gives banks a 24-month window to strengthen their capital base – a move the apex bank says is essential to building a resilient financial system capable of supporting Nigeria’s ambition of becoming a $1 trillion economy.

Under the new framework, international licence banks must raise their paid-up capital to N500 billion, while national-authorised banks face a N200 billion threshold and regional banks N50 billion. Non-interest banks are required to meet N20 billion for national operations and N10 billion for regional licences.

The CBN has emphasised that the exercise will enable banks to absorb macroeconomic shocks, including naira devaluation, inflation, and global financial spillovers, while continuing to provide credit to key sectors such as infrastructure, manufacturing, and energy.

Several banks have already made significant strides. Access Holdings raised around N365 billion through a rights issue, exceeding the N500 billion requirement for international banks. Zenith Bank followed with over N350 billion in fresh equity, while Stanbic IBTC Holdings met the target through a combination of rights issues and balance-sheet surpluses. In the national banking category, Wema Bank raised N150 billion in 2024 and an additional N50 billion in 2025 to surpass the N200 billion threshold, a feat reflected in its nearly tenfold share price growth over the past five years. Globus Bank raised N52.9 billion in 2024 and a further N102 billion in 2025, lifting its paid-up capital above N200 billion, and is now awaiting final verification from the CBN. Smaller banks have also met their targets, including Providus Bank, Greenwich Merchant Bank, Jaiz Bank, and Lotus Bank.

Despite these successes, only 14 of approximately 24 commercial banks had met the new capital requirements as of September 2025, leaving about ten institutions scrambling to raise funds in the final months. Analysts note that banks must demonstrate compliance through their audited 2025 financial statements or provide credible evidence that they will meet requirements by the regulatory cutoff. “The audited 2025 results will be the public proof-point of compliance,” said a senior banking analyst who preferred anonymity. “Banks that haven’t raised sufficient capital by then will face regulatory actions, potential licence downgrades, or merger pressures.”

The recapitalisation drive is expected to reshape Nigeria’s banking landscape. Industry observers predict a wave of consolidation, with mid-tier and smaller banks likely to merge with larger institutions or face licence downgrades. For banks that have already met the thresholds, the benefits are clear: enhanced stability, greater growth headroom, and improved investor confidence. These institutions are better positioned to support large infrastructure projects and expand digital banking platforms aligned with Nigeria’s economic growth targets.

However, short-term challenges remain. Some banks may tighten lending standards or reduce risk-weighted assets as they focus on capital-raising, potentially dampening credit growth during the transition period. Banks still short of the required floors have several options, including rights issues, private placements, strategic mergers, acquisitions, or voluntary licence downgrades. The CBN has temporarily lifted regulatory caps on recognition of Additional Tier-1 capital instruments until the March 2026 deadline to ease the transition.

Experts emphasise that raising capital is only part of the equation. Banks must deploy that capital effectively, manage asset quality, reduce non-performing loans, and channel credit into productive sectors. The success of the recapitalisation programme carries significant implications for investors, depositors, and the broader economy. Stronger-capitalised banks reduce distress risk for depositors while enabling more viable credit flow to infrastructure, manufacturing, trade finance, and small and medium enterprises, critical sectors for achieving Nigeria’s growth targets.

For investors, banks that complete the exercise successfully are likely to enjoy stronger valuations and enhanced growth prospects, while laggards risk being marginalised or absorbed by competitors. With the countdown to March 2026 underway, the message from the CBN is unambiguous: banks must finish strong, with capital raised, audited, and published by the end of 2025. The race is on, and the finish line is in sight.