With the March 31 recapitalisation deadline fast approaching, pressure is mounting on at least 13 Nigerian banks still working to meet the new capital thresholds set by the Central Bank of Nigeria. Industry analysts now warn that mergers could become unavoidable, potentially reshaping the structure of Nigeria’s banking sector in the coming months.
At the close of the latest Monetary Policy Committee meeting, CBN Governor Olayemi Cardoso revealed that 20 banks have successfully met the new capital requirements, while 13 others are nearing completion of their fundraising efforts. Despite earlier fears of widespread disruption, financial consultant Boniface Chizea noted that many banks have shown surprising resilience, avoiding the panic that accompanied past recapitalisation exercises.
However, Chizea acknowledged that lenders unable to meet the deadline may have little choice but to pursue mergers. According to him, consolidation remains the most practical path for struggling institutions, though regulators must ensure that such moves protect depositors and maintain public confidence in the system.
Echoing this cautious outlook, Tunde Amolegbe, CEO of Arthur Steven Asset Management, suggested that while no merger discussions have been publicly confirmed, they may already be taking place behind closed doors. He pointed to past consolidation efforts under Charles Soludo, where regulatory intervention led to the creation of stronger institutions through forced combinations.
Meanwhile, Ayokunle Olubunmi of Agusto & Co expressed optimism that many banks listed as being at an advanced stage may already have secured the required funds, pending regulatory approval. Still, uncertainty remains — especially for banks under separate regulatory oversight — as the deadline looms and the possibility of deadline extensions continues to be debated.
With international banks expected to raise their capital base to N500bn and national banks to N200bn, the coming weeks could determine whether Nigeria’s banking landscape remains stable or undergoes another wave of consolidation.
source: punch