Nigerian banks reached a key regulatory milestone today as the Central Bank of Nigeria (CBN) deadline for meeting new minimum capital requirements expires, with most lenders having already complied and attention turning to non-compliant financial institutions.

The deadline brings to a close a two-year recapitalisation process that has reshaped the banking industry, strengthened capital buffers and widened the gap between large and smaller lenders.

The CBN at the last Monetary Policy Committee meeting confirmed that 32 banks had met the revised capital thresholds ahead of the deadline, showing impressive compliance across the sector.

Big lenders drive compliance

Tier-one banks, including Access Holdings, Zenith Bank, Guaranty Trust Holding Company (GTCO), First HoldCo and United Bank for Africa (UBA),  led the process, raising capital through rights issues, public offers and private placements.

The FCMB Group and Fidelity Bank recently exceeded the N500 billion minimum requirement for international banking licences, alongside the major lenders.

At the national level, lenders such as Stanbic IBTC, Wema Bank, Ecobank Nigeria, Sterling Financial Holdings and Standard Chartered Bank met the N200 billion threshold, while regional banks met the N50 billion requirement.

Non-interest banks, Jaiz Bank, Lotus Bank, Taj Bank and The Alternative Bank, also met the N20 billion minimum, signalling steady growth in Islamic finance.

The recapitalisation, announced by the CBN in March 2024, raised minimum capital requirements significantly, with commercial banks holding international licences required to meet a threshold of N500 billion, N200 billion for national banks, and N50 billion for regional banks. For non-interest banks, the thresholds are N20 billion (national) and N10 billion (regional).

Investor inflows surge 

The exercise triggered strong investor interest, particularly from foreign investors.

Foreign capital inflows into the banking sector rose by 93.25 per cent to $13.53 billion in 2025, up from $7.00 billion in 2024, accounting for 58.26 per cent of total inflows, according to data from the National Bureau of Statistics.

The CBN said banks raised about N4.61 trillion under the recapitalisation, with roughly 27 per cent sourced from foreign investors, underscoring improved confidence in the sector.

“The banking sector recapitalisation programme has recorded commendable progress, with 32 banks having already met the revised capital requirements. 

“This achievement has significantly strengthened the resilience and capacity of the Nigerian banking system, positioning it to effectively mobilise long-term capital, support productive investment, and play its critical role in enabling the transition towards a $1.0tn economy,” the CBN Governor, Olayemi Cardoso, said.

Overall compliance across the industry has been estimated at over 96 per cent, according to the Association of Corporate Affairs Managers of Banks (ACAMB).

“The Nigerian banking industry has once again demonstrated its innate strength and resilience. Achieving over 96 per cent compliance ahead of the recapitalisation deadline is no small feat,” said ACAMB president, Jide Sipe.

However, a small number of lenders remain below the required thresholds as the deadline closes.

Mid-sized banks have struggled to raise capital, with fewer investors and tighter market conditions working against them.

The gap between large and mid-tier lenders has widened, with smaller banks facing a more difficult path to raising capital in a tight liquidity environment.

Options for defaulters

The CBN has maintained that lenders must explore available options, including fresh equity issuance, mergers, acquisitions and strategic partnerships.

Ordinarily, it is expected that banks unable to meet the requirements could face forced consolidation, licence downgrades or other regulatory actions.

This could lead to consolidation in the sector, as weaker banks face pressure to merge, restructure or scale down operations.

However, the apex bank had already given flexibility to a few lenders under regulatory intervention, including Polaris Bank, Keystone Bank and Union Bank, citing legal and structural constraints.

“We remain actively engaged with all relevant stakeholders to ensure that they have an orderly and credible outcome while maintaining financial stability,” Mr Cardoso said.

Unity Bank said its merger with Providus Bank is in the final stages, highlighting ongoing consolidation within the sector.

Concerns 

Analysts said the recapitalisation has strengthened bank balance sheets and boosted investor confidence, but warned that the impact on the real economy remains limited.

The chief executive of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the exercise had been orderly and non-disruptive, with no depositor losses or major job cuts, a departure from previous consolidation exercises.

However, he noted that private sector credit remains about 17 per cent of GDP, below sub-Saharan African average of about 25% and approximately 34% for lower-middle-income countries. 

Peer economies such as South Africa (57.5%), Mauritius (69.8%) and Cape Verde (66.3%) demonstrate significantly stronger financial intermediation.

He said the ultimate success of the reform would be determined not only by stronger balance sheets, but by the extent to which the banking system supports investment, enterprise, job creation and economic transformation.

“At this critical juncture, the priority must shift from capital adequacy to economic impact. Nigeria needs not just stronger banks, but banks that work for the economy,” he said.

Beyond deadline

With the deadline expiring today, attention is turned to the CBN’s final compliance review and the regulatory steps that may follow.

The central bank is expected to issue a formal status update and outline what next for non-compliant banks in the coming days.

The capital-raising phase may be over, but the challenge ahead is ensuring that the stronger banks actually use their newfound strength to boost lending and drive the economy.