20 Banks Intensify Strategies as CBN’s Recapitalisation Deadline Nears

Nigerian banks are accelerating efforts to meet new capital requirements as the ongoing banking recapitalisation exercise enters its final and most critical stage.

With only 52 working days left before the March 31 deadline set by the Central Bank of Nigeria (CBN), many financial institutions are fine-tuning their funding options. Industry observers say there is now increased reliance on private equity placements and possible shifts in banking licence categories.

In his most recent public update on the programme, CBN Governor Olayemi Cardoso confirmed that 16 banks had already met the revised capital thresholds, while another 27 institutions were in various stages of raising funds.

However, Deputy Governor for Economic Policy, Dr. Muhammad Abdullahi, provided a slightly higher figure, stating a few days ago that at least 20 banks had successfully met the requirements.

His statement followed announcements from United Bank for Africa (UBA), Fidelity Bank and First Bank confirming that they had fulfilled the recapitalisation conditions after receiving final approvals for their latest capital-raising exercises.

Nigeria presently has 44 deposit-taking banks operating under different licence categories.

Sources close to the process disclosed yesterday that the CBN was considering the most practical and least disruptive exit strategies as the recapitalisation exercise approaches conclusion.

According to a highly placed source, the apex bank would soon unveil “conclusive plans” regarding the resolution of at least three banks currently under its management.

The source added that one of the banks, known for its longstanding operations in the Southwest and strong presence in Lagos, might be reclassified from a national bank to a regional bank.

At least seven other banks are reportedly considering similar moves to downgrade from national to regional licences, given the concentration of their operations and the increasing reach of digital banking services.

Meanwhile, another institution with an international banking licence hinted over the weekend that it might scale down to a national licence in the short term to meet the deadline, while continuing efforts to raise additional capital that would eventually enable it to regain international status.

READ ALSO: CBN Directs Banks To Provide Recapitalisation Plans

Regulatory sources indicated that the CBN had approved a flexible framework that allows “an unencumbered two-way movement along the banking categorisation line,” permitting banks to either scale up or scale down their licences once they provide verified proof of meeting the required capital base.

The apex bank groups banks into three major categories—international, national and regional—based on their financial strength and operational reach.

Investment banking sources said many institutions were still exploring opportunities for special placements, with discussions ongoing with high-net-worth individuals and institutional investors.

Market analysts expect most of these private funding arrangements to be concluded within the next seven weeks.

Under existing recapitalisation guidelines, banks are required not only to raise fresh funds but also to subject them to a rigorous capital verification process before approvals are granted for allotment and final deployment.

The CBN serves as the final approving authority in a tripartite capital verification committee that also includes the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC).

The committee is responsible for scrutinising all new funds raised by banks under the recapitalisation programme.

However, market sources noted that the strict capital verification process and the narrow definition of qualifying capital—limited largely to nominal equities—have continued to constrain the ability of banks to mobilise funds quickly.

Despite these challenges, most analysts remain optimistic about the overall outcome of the exercise.

“Many banks have actually met the recapitalisation requirements. Many banks, I mean, over 20 banks have met the requirements.

“So, I think good progress has been made, and I’m really confident that there is not likely to be a major issue, given the progress that has been made so far,” a team lead at a respected financial think-tank said yesterday.

Drawing comparisons with the 2004–2005 banking consolidation era, when several banks were forced into mergers or liquidation, the analyst described the current process as far more stable, adding that it “is much better and reassuring”.

The recapitalisation programme was formally launched in March 2024 when the CBN issued a circular reviewing the minimum capital requirements for commercial, merchant and non-interest banks.

Under the new framework, commercial banks with international authorisation are required to hold a minimum capital base of N500 billion, while those with national licences must maintain N200 billion. Regional commercial banks are expected to meet a threshold of N50 billion.

Merchant banks must hold at least N50 billion, non-interest banks with national licences require N20 billion, and non-interest banks with regional licences need a minimum of N10 billion.

The 24-month compliance period ends on March 31, 2026.

Unlike previous exercises, the CBN now defines minimum capital base as the sum of share capital and share premium, rather than total shareholders’ funds.

Although the apex bank has yet to publish an official list of compliant banks, disclosures from the Nigerian Exchange (NGX), audited financial statements and public announcements indicate that most top-tier banks have already met the new thresholds.

These include Guaranty Trust Bank, Access Bank, Zenith Bank, United Bank for Africa (UBA), First Bank of Nigeria and Fidelity Bank.

Others that have reportedly satisfied the requirements include Jaiz Bank Plc, Wema Bank, Ecobank Nigeria, Stanbic IBTC Bank, Citibank and Standard Chartered Bank.

Industry stakeholders expect that the coming weeks will determine the final shape of Nigeria’s banking landscape as the recapitalisation process draws to a close.