Nigerian Banks to Raise Extra N900bn in 2025 as Recapitalisation Deadline Nears

Nigerian banks are expected to raise an additional N900 billion in fresh capital by the end of 2025, as lenders race to meet the Central Bank of Nigeria’s (CBN) recapitalisation deadline. According to the latest Nigerian Banking Industry Report by Agusto & Co, the sector’s outlook remains stable despite regulatory headwinds, with banks intensifying fundraising efforts to strengthen their balance sheets.

The recapitalisation directive, introduced in March 2024, requires banks with international licences to boost their minimum capital base to N500 billion, national banks to N200 billion, and regional banks to N50 billion. Non-interest banks were given lower thresholds of N20 billion for national and N10 billion for regional operations. The CBN set a compliance deadline of March 2026, with analysts estimating that the industry must raise about N4.2 trillion to meet the requirement.

So far, about N1.7 trillion was raised in 2024, and an additional N800 billion between January and July 2025, bringing the total to N2.5 trillion. The CBN Governor, Olayemi Cardoso, confirmed that eight banks have already crossed the minimum capital requirement, while others are embarking on a second round of fundraising. Agusto & Co noted that most of the capital raised came from domestic investors, showing strong confidence in the sector.

However, the recapitalisation drive comes with challenges. The termination of regulatory forbearance by the CBN in June 2025 has forced banks to properly classify non-performing loans, which rose to 5.2% of loan books in 2024 due to naira depreciation and loan deterioration. Analysts expect this figure to temporarily rise to 6.9% in 2025, as impaired loans are reclassified and written off under new regulatory rules.

Despite short-term pressures, the banking industry is expected to rebound in 2026. Agusto & Co projects that profitability indicators will dip by nearly 20% in 2025, with return on equity falling to 27.3% from 48.2% in 2024. Nonetheless, as new capital is fully deployed and impaired loan provisions stabilise, Nigerian banks are projected to emerge stronger, with improved compliance, resilience, and growth prospects by 2026.

Source: Punch