Recapitalisation: Some Banks Set to Hit CBN Requirements As Others Mull Switching Licenses

• Nigerian banks appear all set to hit new capital requirements way ahead of the March 2026 deadline
• The Central Bank of Nigeria (CBN) raised the capital requirements across all tiers, requiring all the banks to visit the capital market
• Analysts who spoke to Legit.ng confirmed that while some will meet the requirements, a few might need to switch licenses to stay in business

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

All indicators show that several Nigerian banks are on course to meet and surpass the Central Bank of Nigeria’s (CBN) recapitalisation targets even before the March 2026 deadline.

Several big players in Nigeria’s banking industry like FCMB and GTCO have completed the first part of their capital raise efforts, through public offers and rights issues, or private placement in a few cases.

Interestingly, the market outlook remains positive, especially given the enthusiasm that has driven already completed capital raising exercises.

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Some banks may switch licenses

Analysts at Cardinalstone Registrars told Legit.ng that banks unable to meet the capital requirements might switch licenses to reduce their burden.

They put it thus;

“Banks with international licenses have an average capital shortfall of c.280 billion. This huge shortfall may necessitate banks with materially insignificant international footprints (e.g. with inconsequential non-Nigerian PBT contributions) to weigh the cost and benefits of retaining their international licenses given the new capital requirement. Hence, we see the possibility of some switches from international to national licenses in the coming months.”

The research analysts also project that despite the dilution the raised capital will bring, earning assets will expand to make up for it.

Bank recapitalization will drive sector growth

Stakeholders in the industry are positive that the recapitalization exercise, when completed, will birth a stronger banking sector in Nigeria by 2026, the SUN reports.

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Olatunde Amolegbe, CEO of Arthur Stevens Asset Management, noted in an interview that the exercise will drive significant investment into the sector, and engineer economic transformation.

Giving his outlook for the Nigerian capital market, Amolegbe, also the former president of the Chartered Institute of Stockbrokers, predicted that as the banks achieve their capitalization targets, the sector will get stronger.

He also projected that other macroeconomic indicators will improve in 2025m with inflation declining to about 27.4% before the end of the year, and benchmark interest rates moderating.

Amolegbe commended the CBN's efforts to stabilize the foreign exchange market, adding that this would encourage investment into the Nigerian capital market due to reduced uncertainty, and perhaps help lower inflation rates.

He explained;

“Consequently, we anticipate that monetary authorities may either maintain the current interest rate levels or consider a gradual reduction. This confluence of factors – FX market stability, declining inflation, and potentially lower interest rates – is expected to create a favourable environment for the equities market.”

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Amolegbe projected that with the capitalization exercises, and the listing of the Dangote Refinery and Nigerian National Petroleum Corporation Limited (NNPCL), the All Share Index could grow up to 39%.

Banks race to raise capital

In related news, Legit.ng reported that five Nigerian banks hope to raise N1 trillion capital, ahead of the March 2026 deadline.

Interviews with the managing directors showed that some would be doing a public rights offer, while a few would explore other options.

With the new requirements, commercial banks with international authorization have a threshold of N500 billion, while national and regional banks have respective thresholds of N200 billion and N50 billion to meet.

Source: Legit.ng