At least three bank mergers are expected in Nigeria in early 2026 as lenders race to meet the Central Bank of Nigeria’s (CBN) new minimum capital requirements before the March 31 recapitalisation deadline, according to a new report by financial rating firm DataPro. The anticipated deals signal mounting pressure on smaller banks as regulatory demands reshape the industry.
In its 2026 Banking Sector Prospects in Nigeria, DataPro noted that most Tier-1 banks had already met the revised capital threshold by the end of 2025, while several others have announced compliance in the new year. This has left Tier-2 and smaller institutions facing increasing regulatory and market scrutiny to strengthen their balance sheets or pursue consolidation.
DataPro’s Enterprise Risk Management analyst, Idris Shittu, said the recapitalisation drive has triggered an active mergers and acquisitions environment, but warned that it also comes with significant execution risks. These include post-merger integration challenges such as IT system harmonisation, cultural alignment, and the absorption of non-performing loans, particularly for smaller banks operating under tight timelines.
Beyond consolidation pressures, Shittu identified what he described as “triple threats” confronting the banking sector in 2026: tighter regulation, capital strain, and rapid technological disruption. He explained that a high Cash Reserve Ratio of 45 per cent continues to constrain liquidity, forcing banks to rely more on fee-based income, while fintech firms such as Moniepoint and Opay are aggressively expanding their footprint among retail and SME customers.
Looking ahead, Shittu projected a decline in the number of banks by the end of 2026, warning that poor integration could undermine the benefits of consolidation. While the move could produce stronger institutions capable of supporting Nigeria’s $1 trillion economy ambition, past experiences show that weak due diligence and cultural clashes can derail mergers. However, PwC struck a more optimistic tone, saying recapitalisation, fintech innovation, and strong capital market growth could deepen liquidity, attract investors, and sustain momentum across banking, fintech, and insurance sectors in 2026.
source: punch