• Only six of Nigeria's 13 listed banks currently meet the Central Bank of Nigeria's (CBN) new recapitalization requirements.
• The CBN significantly raised minimum capital thresholds in March 2024, with a March 2026 deadline for compliance.
• The reform aims to strengthen the banking system and support larger-scale financing, potentially leading to sector consolidation.

 Six months before the deadline set by the Central Bank of Nigeria, pressure mounts on other institutions. The Bank justified this reform by the necessity to strengthen the banking system's resilience against external shocks. It also aims to support larger-scale financing.

Among the 13 institutions listed on the Nigerian Exchange (NGX), only six currently meet the Central Bank of Nigeria (CBN) requirements: Access Bank, Zenith Bank, GTBank, Wema Bank, Jaiz Bank, and Stanbic IBTC.

Access Bank became the first tier-1 bank to cross the 500 billion naira ($332.8 million) threshold required for banks with an international license. Its parent company, Access Holdings, obtained authorities' approval in late 2024 for a 351 billion naira bond issue via a rights issue. As a result, capital and share premium surged to 594.9 billion naira in 2024, up from 251.8 billion a year earlier, notably due to the issuance of nearly 18 billion new shares.

Thresholds Raised Across All Categories

In March 2024, the CBN significantly raised the minimum capital required for institutions. Banks with an international license must now reach 500 billion naira, compared to 200 billion for those with a national license. Regional banks face a 50 billion naira floor. Islamic institutions must possess at least 20 billion naira when operating nationally and 10 billion for regional coverage.

The CBN set the deadline for March 2026, giving banks two years to mobilize the necessary funds. However, six months before the intermediate deadline of March 2026, investors closely observe the pace of progress.

In July, the Central Bank had asserted that eight institutions were already compliant, a figure that included unlisted banks. But market reality shows the effort remains considerable: according to several reports, the sector still needs to raise nearly 900 billion naira by the end of 2025 to meet the March 2026 deadline. Several banks have not yet reached the required thresholds and actively pursue rights issues, private placements, or other financing mechanisms.

A Difficult Equation for Laggards

For the seven other institutions still below the threshold, maneuverability shrinks. Options remain limited in a constrained economic environment. These include rights issues, calls on the bond market, or searching for strategic investors. This environment features persistent inflation, naira volatility, and tightened credit conditions.

The CBN justified this reform by the necessity to strengthen the banking system's resilience against external shocks. It also aims to support larger-scale financing in a Nigerian economy seeking massive investments, notably in energy and infrastructure.

Consolidation Ahead?

Recapitalization could accelerate a new wave of mergers and acquisitions. Several analysts anticipate that mid-sized banks will struggle to raise the necessary funds independently and will need to consider consolidation. "The Nigerian market could transition from 20 banks to a dozen more robust players," estimates a banking consultant in Lagos.

Beyond the regulatory constraint, the exercise constitutes a test of confidence. Banks that successfully raise fresh capital will send a strong signal to the market and rating agencies. This occurs in a context where Nigeria seeks to reassure about its macro-financial stability.

This article was initially published in French by Fiacre E. Kakpo

Adapted in English by Ange Jason Quenum