Nigerian Banks Progressing Towards Meeting 2026 Recapitalisation Deadline – Fitch Ratings

Fitch Ratings has reported that Nigerian banks are on track to meet the Central Bank of Nigeria’s (CBN) recapitalization deadline set for March 2026. The new guidelines issued by the CBN require different categories of banks to meet new capital thresholds, with international banks needing N500bn, national banks N200bn, and regional and merchant banks N50bn. The banks have several compliance options, including raising equity, engaging in mergers or acquisitions, or altering their licences.

The agency highlighted the progress made by Fitch-rated banks, many of which have already raised capital or initiated the process to do so. Larger banks such as Access Holdings and Zenith Bank have already met the N500bn capital requirement, while others like United Bank for Africa and Guaranty Trust Holding Company are implementing phased capital raises. Additionally, Fidelity Bank and FCMB Group have completed initial capital raises but will need further efforts to meet their international licence requirements.

Banks in the second-tier category are facing higher capital-raising requirements, but they have approval for capital increases, with some considering downgrading to national licences if necessary. In contrast, smaller banks such as Ecobank Nigeria and Jaiz Bank have met their capital requirements with minimal efforts and continue to be in compliance with the new rules. However, some banks, including Stanbic IBTC Holdings, are also in the process of raising additional capital.

Fitch expressed confidence that strong investor interest has ensured most capital-raising efforts have been successful. As a result, the likelihood of major banking sector consolidation has decreased, especially among first- and second-tier banks. The rating agency also noted that while mergers and acquisitions might still occur among third-tier banks, the overall outlook remains positive for most banks in the sector.

On the other hand, Union Bank of Nigeria (UBN) and several smaller, third-tier banks have struggled to meet capital requirements. Some have delayed their capital-raising efforts, while others, like Wema Bank, have approval but are yet to begin the process. Fitch indicated that mergers or licence downgrades are still possible among the smaller banks, with the overall trend showing a more resilient and well-capitalised banking sector in Nigeria.

SOURCE: PUNCH