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CBN Governor, Olayemi Cardoso during the Monetary Policy Committee (MPC) meeting last week confirmed that eight banks have met recapitalisation.

He noted that other banks have taken steps toward complying with the deadline, adding that one bank has listed its shares on the London Stock Exchange (LSE).

“Members also noted the continued stability in the banking system evidenced by the stable financial soundness indicators (FSIs) which will further be supported by the ongoing banking recapitalisation exercise,” Cardoso said.

“The MPC noted that eight banks have fully met their recapitalisation requirements while others are making progress towards meeting the deadline.

“The committee, thus, urged the management of the bank to sustain its oversight of the banking system to ensure continued resilience, safety, and soundness of the financial system.”

The recapitalisation programme

The Cardoso-led CBN governor had, through a circular dated 28th March 2024, announced recapitalization of the banking sector, prescribing an increment in the minimum capital requirements for “commercial”, “merchant”, and “non-interest banks” in Nigeria.

Commercial banks with international licenses are required to have minimum share capital and share premium of N500 billion, while others with national banking licenses are required to have minimum share capital of N200 billion by the deadline of March 31, 2026.

Similarly, those with regional banking licence are expected to have a minimum capital of N50bn while non-interest banks are expected to have a minimum share capital of N20bn.

With about eight months to the March 31, 2026 deadline, many banks have started raising new capital in order to meet the requirements.

In 2024 alone, banks raised more than N2 trillion in preparation for the recapitalisation.

However, more capital raisings are in the offing as banks move to close some noticeable financing gaps.

Checks on the website of the CBN indicated that there are 36 deposit money banks as of April 26, 2024. They included seven with international authorisation. They are Access Bank Limited, Fidelity Bank, First City Monument Bank Limited, FirstBank Nigeria Limited, Guaranty Trust Bank Limited, United Bank for Africa and Zenith Bank PLC.

Those holding commercial banking license with international authorisation are Citibank Nigeria Limited, Ecobank Nigeria Limited, Heritage Bank, Globus Bank, Keystone, Polaris, Stanbic IBTC Bank, Standard Chartered Bank, Sterling Bank, Titan Trust Bank, Union Bank, Unity Bank, Wema Bank, Premium Trust Bank and Optimus Bank.

Commercial Banks with Regional Authorisation are Providus Bank, Parallex Bank, SunTrust Bank and Signature Bank.

For the non-interest banks, there are Jaiz Bank, Taj Bank, Lotus Bank and Alternative Bank Limited.

Dozens yet to meet recapitalisation

Daily Trust learnt that as of the time of filing this report, majority of the banks are currently struggling to meet the recapitalisation requirements ahead of the March deadline.

Those who have met the requirements are majorly banks with international authorisation. But even among them, it was learnt that two of them are still constrained by the forbearance loans in their balance sheet.

What is forbearance?

Daily Trust reports that the apex bank in a June 13 circular froze dividends and other capital outflows for banks still operating under regulatory leniency frameworks introduced in the aftermath of COVID-19 and the attendant economic downturn.

Regulatory forbearance is a policy tool used by central banks that permits banks and financial institutions to maintain operations despite falling below required capital thresholds.

It is a provisional measure that allows the restructuring of assets such as non-performing loans.

By June 30, 2025, the Apex Bank issued another circular titled, “Regulatory Measures to Support Exit from Forbearance Regime.”

In the circular, the affected banks are required to prepare and submit a comprehensive Capital Restoration Plan to the CBN on or before the 10th working day, following the end of the quarter with effect from June 30, 2025.

The CBN urged all affected banks “to proactively engage with the Banking Supervision Department for guidance and alignment throughout the transition.”

“Banks are expected to demonstrate full commitment to these measures, uphold prudential standards, and contribute to the overall health and resilience of the Nigerian financial system.

“These integrated measures represent a firm but supportive framework for the final phase of exiting the regulatory forbearance regime, and reflect the CBN’s strategic focus on macro-financial stability, responsible banking practices, and global best standards.”

A source privy to the ongoing development in the financial system explained that forbearances were given on bad loans.

And with the CBN policy stopping the forbearances, it means the banks would have to make provision for their bad loans.

“The implication of this is that banks will have to make 100 per cent provision for those bad loans and with this, their balance sheet will be negative.

“If they can’t meet recapitalisation, you wonder what will happen. CBN will definitely determine what will happen,” the source said.

Recapitalisation status

In a report titled, “Tier 1 Banks Report: Getting Bigger, Braver, and Dominant – The Class of 2025,” Proshare noted that both ZENITH Bank and ACCESSCORP have achieved their recapitalisation thresholds, with ZENITH Bank’s new capital at N614.65bn and Access Bank’s at N594.90bn.

GTCO and FIDELITY Bank are on their way to a N500bn threshold, and ETI has chosen to retain a national license for its local subsidiary, Ecobank Nigeria, at N201bn.

Evaluating banks before, during, and after recapitalisation, the report suggests that the recapitalisation of Nigerian banks is timely, “even though it may result in a short-term decline in banks’ return on equity, assets, and capital employed.”

A report recently listed eight banks that have met the recapitalisation requirements. They included Access Holdings PLC, Wema Bank, Zenith Bank, Lotus Bank, Jaiz  Bank, Providus, Stanbic IBTC and Greenwich Merchant Bank.

Options before the banks – Expert

Ayokunle Olubunmi, Head of Financial Institutions Rating at Augusto and Co, in a chat with our correspondent stated that many of the banks are still positioned to meet the requirements as the capital raising programme continues.

Daily Trust reports that recently the market value of all Nigerian listed banks rose to N15.65 trillion. This was also driven largely by the increased capital raising activities in 2024.Speaking with Daily Trust, Olubunmi stated that the next six months would witness uptake in capital raising in a bid to meet the requirements.

He said, “So in my view, if you ask what to expect in the next couple of months? Yes, there will be uptake in capital raising activities, because from speaking to a lot of banks, a lot of them have a cutoff of December 31st, that internally, they want to try and even resolve all of them.

“And don’t also forget, there are some that have raised money that are awaiting CBN verification, to be fair to CBN, I think it has added like Wema Bank, to be fair with them. But I think there will be an uptake in capital raising activities,  more funds will even come into the market.

“A lot of them are going to take it more seriously. But I think by that December, we’ll be seeing those that will, the way things are going now, I think a lot of them, if you exclude those that are under CBN, if I can use CBN ownership, the Keystone, the Polaris, if you remove all those ones, the Union, Titan, most of the banks are in line with their own plan. You know, a lot of the banks are working in line with their plan.”

What will drive merger, acquisition

He added, “One thing that is obvious to us now, is that we are gradually seeing the impact of scale, because you are seeing banks that are making profit. Last year we saw banks that were making a trillion in profit, and there are some that are struggling to even make a billion in profit.

“So, I would say that in the medium term, there will be mergers, not because you can’t make the capitalization, but you realize that, look, instead of having a small pie, let me just merge it with somebody else and have a bigger pie.

“That’s one. And then number two, from what I’m seeing, at least from my own discussion on the market, for now, I think a lot of them are still down playing mergers and acquisition. A lot of them are still down playing.

Of course, you know, in this kind of environment, in this kind of scenario, things are fluid. They can change, but as of today, if you look at it, if you are going to have any merger, the merger is going to be among the medium sized banks.

“For the big sized banks, like one bank MD was saying, ‘look, why do I want to go through the headache of doing a merger with a small bank because all of their whole balance sheets are just like three branches? Why do I want to go through that?

CBN may grant extension – Expert 

A Professor of Finance, Mufutau Ijaiya in a chat with our correspondent said the CBN may choose to grant extension to some of the banks that are yet to meet the requirements.

He however stated that banks that are unable to meet the capital threshold should consider merger.

The University Don said, “The option first is that they can merge, the banks can merge. The CBN can also give them extension, that’s what the CBN can do now. We know that the economic environment now is not that palatable.

“So what they can just do is that they should extend for them but meanwhile you should know that it is not flat for all the banks, because we have three categories of banks. So those small banks can merge with the big ones so they can raise enough capital that is what the CBN should be looking at.

“But the truth is that if they can’t meet it now, they cannot make all of them to close their shops now, that would bring a lot of pressure on the economy and not even only that, apart from the fact that they are also helping the economy, people have money there, that could cause a lot of problems for the investors and even depositors who have money there.

“So they should thread softly so they can raise that money, but I’m sure that they would extend.”

Nigerian banks not well capitalised

According to Ijaiya, Nigerian banks are not well capitalised and they are susceptible to any external shock.

“And when there is any shock they are easily affected. By the time we look at the rate of exchange, and you look at the dollar content of our human product capital, it is very little, that if you look at the capitalized amount, it is very negligible that is the reason why when you look at other economies, you will find out that when you put about three or four banks together in Nigeria they are not even up to one bank in USA or even South Africa,” he added.

Recapitalisation, he added, would also assure depositors of the safety of their deposits and position Nigerian banks to fund the real sector of the economy and major capital projects.

“Nigerian banks should be able to fund real time projects, most of the time Nigerian banks, what they fund mostly is business, you don’t see them funding real capital projects, they have a role to assist the country to develop and the only way you can develop Nigeria is to look at the real sector of the economy like  agriculture, mining  and so when the banks are well capitalized, they would be able to finance the real sector of the economy and that would even help the economy to grow.”