Nigerian banks race against time as CBN recapitalisation deadline looms

Nigeria’s banking sector has entered the critical final phase of its recapitalisation drive, with lenders accelerating capital-raising initiatives ahead of the Central Bank of Nigeria’s March 31, 2026 deadline.

According to Proshare analysts, industry activity moderated during the week ended February 12, as market focus shifted from fundraising announcements to regulatory validation and capital verification procedures.

FCMB Group is currently undergoing capital verification by the CBN to determine whether it has satisfied the new N500 billion minimum capital requirement for international banks.

The group secured its national banking licence in 2024 following an oversubscribed public offer and completed an additional N160 billion public offer last year in its bid to retain its international authorisation.

Industry observers view this verification process as the final regulatory hurdle. A successful outcome would likely trigger a formal confirmation of FCMB’s continued international operations, positioning the bank at the last checkpoint before the sector transitions to tighter capital standards.

Sterling Bank has yet to unveil its recapitalisation strategy, though market analysts anticipate either a rights issue or private placement to bridge the gap between its current capital position of approximately N167 billion and the N200 billion requirement.

GTCO Plc has already taken proactive measures, completing a N10 billion private placement through the issuance of 125 million shares at N80 each to a single investor.

Proshare analysts characterise this move as strategic capital buffer strengthening rather than a regulatory necessity, demonstrating sustained investor confidence and early positioning for more stringent industry conditions.

First HoldCo Plc’s unaudited 2025 results revealed another critical dimension of the recapitalisation imperative. A substantial impairment charge weighed on earnings, illustrating how asset-quality deterioration can rapidly deplete capital reserves.

The results underscore the importance of forward-looking capital planning and robust governance amid rising regulatory expectations.

Market speculation points toward potential consolidation, including unconfirmed discussions about a strategic merger between two tier-1 banks and possible bank-led investments in Nigeria’s refinery and energy infrastructure.

These developments reflect growing institutional appetite for diversification and enhanced scale.

Across smaller and mid-tier institutions, recapitalisation efforts increasingly involve foreign participation and consolidation as Union Bank reportedly attracted interest from UAE-based investors, though a legal dispute involving a former core investor requires resolution

Also, Keystone Bank is drawing attention from both domestic and foreign investors, with potential for a joint acquisition

Polaris Bank is expected to pursue investor-led recapitalisation or merge with another tier-2 lender—a move analysts believe would support industry consolidation

The CBN appears receptive to mergers and acquisitions as a pathway to building more resilient institutions.

While domestic investors continue showing interest in distressed lenders, analysts suggest foreign partnerships may prove essential for meeting unencumbered capital requirements.

The Central Bank’s latest fintech report adds another dimension to the recapitalisation narrative, highlighting rapid digital finance growth and the need for regulatory alignment to sustain innovation.

For traditional banks, these findings reinforce the imperative of balancing competitive pressures from fintechs with partnership opportunities that can extend reach and improve efficiency.

With approximately two months remaining until the deadline, most tier-1 and tier-2 banks appear to have met revised capital thresholds. Tier-3 lenders, however, continue facing pressure to secure funding or pursue combinations to remain viable in the post-recapitalisation landscape.

Market attention now focuses on regulatory confirmations, including FCMB’s verification outcome, as the sector approaches what many describe as its most significant capital restructuring in years.

About The Author

Dele Fashomi

Dele Fashomi, seasoned journalist and communication teacher, is a holder of Master of Arts degree in Communication and Language Arts from the University of Ibadan in 1992/93.

Earlier, he had bagged a Bachelor degree from the same university in 1984, after which he proceeded to the Nigerian Institute of Journalism, Lagos, in 1990, for a postgraduate diploma in Journalism.

He had done many courses in communication, including the EU-BBC Editing Course in 2002.

Mr. Fashomi combines effectively the practice, research and teaching of communication. And to date, he has published two academic works in communication: Issues in Communication Technology and Policy (2010) and Economic and Social Issues in Advertising and PR (2013).

He had his first break in the Nigerian media in Concord Newspapers in 1990 and today, he has over two and half decades experience earned in several newspapers.

He has been part of many start-ups, such as The Republic (1987), The Comet (1999), The Anchor 2001 – 2002; Sun Newspapers (2003); Westerner newsmagazine (2005 – 2010) as Editor; National Life (2011) as Sunday Editor, and Newswatch Newspapers (2012- 2016) as Daily Editor.

Dele Fashomi is now the Publisher/Editor-in-Chief of Newstide247.com newspaper online, which he started in July 2015. He is also into biography writing, with many books in his trail, some of which he wrote alone and one he co- authored with his mentor, Mr Dare Babarinsa, entitled:  Olabiyi Durojaiye – DARE TO BE DiFFERENT. He also guided and collaborated with Pa Olatunji Odusanya in writing his autobiography – AGAINST ALL ODDS. There are many other books in the works under his pen.

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