Nigerian banks are making significant strides toward meeting the March 2026 recapitalization deadline set by the Central Bank of Nigeria according to a recent report by Fitch Ratings.
The international rating agency, in a non-rating commentary published on its website, noted that most banks have already begun capital-raising efforts and are on course to meet the new minimum capital requirements.
In March 2024, the CBN mandated that banks must comply with new capital thresholds by the first quarter of 2026. Under the directive, commercial banks with international licences must maintain a minimum capital of N500 billion, while those with national licences require N200 billion. Regional commercial and merchant banks must meet a N50 billion threshold.
Banks have been given three options to comply: raising equity, engaging in mergers and acquisitions, or modifying their licences.
Fitch highlighted that banks it has rated have made considerable progress, with many either completing capital-raising exercises or formally initiating the process.
The report also pointed out that the recapitalization efforts are strengthening the banking sector by mitigating the impact of naira devaluation and fostering business growth.
Leading the charge, Access Holdings and Zenith Bank have successfully raised enough capital to meet the N500 billion requirement for an international licence. Meanwhile, First Bank Holdings, United Bank for Africa, and Guaranty Trust Holding Company are adopting a phased approach, securing initial capital injections while awaiting regulatory approval for additional fundraising.
Fidelity Bank and FCMB Group, categorized as second-tier banks, have also begun the process but will need to raise further capital to maintain their international licences.
Ecobank Nigeria Limited and Jaiz Bank have already met their required capital thresholds, while Stanbic IBTC Holdings has launched a rights issue to secure its national licence.
Fitch also noted that strong investor confidence has played a crucial role in the success of most capital-raising initiatives, reducing the likelihood of significant banking sector consolidation.
However, some institutions, particularly Union Bank of Nigeria and third-tier banks, have been slower in their recapitalization efforts.
Wema Bank has secured shareholder approval to raise capital and plans to begin the process in April, while Coronation Merchant Bank recently received board approval.
Fitch suggested that mergers, acquisitions, or licence downgrades may be necessary for some third-tier banks that are struggling to meet the new requirements.
