Banks Rush to Complete Mergers and Acquisitions Ahead of CBN March 31 Recapitalisation Deadline

Nigeria’s banking sector is entering a high-stakes phase as the Central Bank of Nigeria’s (CBN) March 31 recapitalisation deadline looms. The directive, aimed at strengthening financial stability and expanding lending capacity, has sparked intense activity in boardrooms across the country. Bank insiders report a flurry of merger and acquisition negotiations, as well as aggressive capital-raising efforts, signaling a potentially historic reshaping of Nigeria’s financial landscape.

Data shows that 23 deposit money banks (DMBs) have already met the new capital thresholds, but behind these headline figures, mid-tier banks are racing to secure strategic investors. Some institutions are engaged in “survival bidding wars,” simultaneously negotiating with multiple suitors to secure the best valuations before the regulatory deadline forces decisions.

Tier-one banks such as Access, Zenith, and GTCO have largely solidified their positions through substantial capital raises. UBA and First Bank also surpassed the N500 billion mark via rights issues, private placements, and restructuring, while Stanbic IBTC strengthened its balance sheet through shareholder support. Mid-tier players like Wema Bank and PremiumTrust Bank have drawn attention with innovative equity strategies, signaling investor confidence in indigenous growth banks.

Mergers are also gaining momentum. The successful acquisition of Union Bank by Titan Trust Bank has created a template for regulatory-driven consolidation with commercial upside. Reports indicate that the proposed merger between Providus and Unity Banks is in its final stages, with an official announcement expected soon. Meanwhile, foreign investors, including Middle Eastern groups and African private equity firms, are quietly re-entering recapitalisation talks following months of currency-driven caution.

Experts caution that while recapitalisation could strengthen the financial sector, weaker banks may face limited options, potentially leading to consolidation, branch rationalisation, and job losses. Analysts at Proshare and CardinalStone Partners note that investor appetite for new equity has moderated, making private equity participation increasingly decisive. With weeks remaining before the deadline, the next few weeks will determine which banks survive independently and which become consolidation targets, setting the stage for Nigeria’s most significant banking restructuring since 2005.

source: The sun