FCMB and Sterling Bank among other tier 2 banks are currently faces mounting pressure over CBN recapitalisation deadline.
NewsOnline Nigeria reports that First City Monument Bank (FCMB), Sterling Bank among other tier 2 banks are under mounting pressure ahead of the Central Bank of Nigeria’s (CBN) 2026 recapitalisation deadline.
A new report by SB Morgen (SBM) Intelligence highlights that these lenders may need to aggressively scale up operations or risk being forced into mergers.
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The report, titled “Capital, Competition, and Consolidation: How Nigeria’s Tier-2 Banks Are Responding to the CBN’s 2026 Recapitalisation Order,” warns that the new capital requirements will reshape the banking sector and determine which institutions remain competitive.
In March 2024, the CBN directed international banks to raise their capital base to ₦500 billion, national banks to ₦200 billion, and regional banks to ₦50 billion, with compliance due by March 2026. The policy, the apex bank said, is designed to strengthen financial stability and prepare the sector to support Nigeria’s $1 trillion economy target.
According to SBM, the share price performance of tier-2 banks over the past five years reflects both resilience and challenges amid regulatory shifts, economic volatility, and recapitalisation pressures.
FCMB’s share price rose from ₦3.33 in 2020 to ₦9.25 by mid-2025, while Sterling Bank’s stock tripled from ₦1.70 to ₦6.16, fueled by retail and SME banking growth as well as disciplined asset management. Stanbic IBTC has also shown stability in performance despite increasing regulatory demands.
To meet capital thresholds, FCMB Group has laid out a three-phase plan to raise ₦400 billion. The bank recently completed a ₦144.6 billion public offer that was oversubscribed by 33 percent and expects another ₦20–₦40 billion from a convertible note issuance. The next phases will involve IPOs, private placements, and offshore funding to complete the target.
Sterling Financial Holdings is pursuing private placements, rights issues, and a $400 million public offering to strengthen its capital base, while Stanbic IBTC is expected to leverage its institutional stability and investor confidence to meet the recapitalisation target.
SBM predicts that consolidation is inevitable as the 2026 deadline approaches, with possible mergers and alliances among mid-tier lenders.
“The financial performance of these mid-tier banks in 2025 underscores their capacity to compete and thrive, even as Tier-1 institutions consolidate their dominance,” the report said.
Despite rising funding costs and the need for stronger non-interest income streams, SBM concluded that tier-2 banks remain largely profitable, efficient, and adaptable. However, their survival now depends on how effectively they execute bold capital-raising strategies and leverage technology to meet regulatory demands before the deadline.
