Nigerian Banks have entered a new era of strength amid CBN recapitalisation drive.
NewsOnline Nigeria reports that the Nigeria’s banking sector is currently experiencing a transformative period marked by renewed investor confidence, regulatory backing, and significant progress in recapitalisation efforts.
The Central Bank of Nigeria (CBN), under Governor Olayemi Cardoso, has reaffirmed the safety and soundness of the country’s financial institutions. According to the Monetary Policy Committee (MPC), the sector remains resilient and well-positioned to support Nigeria’s ambitious economic agenda.
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Notably, eight banks have already met the new capital requirements ahead of the March 31, 2026 deadline set by the CBN. This comes after the apex bank launched a two-year recapitalisation programme on April 1, 2024, aimed at strengthening banks in line with the federal government’s $1 trillion GDP target by 2030.
Cardoso emphasized the strategic importance of this move, saying:
“Will Nigerian banks have sufficient capital to service a $1 trillion economy in the near future? In my opinion, the answer is ‘No,’ unless we take decisive action.”
Key Recapitalisation Guidelines:
Commercial Banks (International license): N500 billion
Commercial Banks (National license): N200 billion
Commercial Banks (Regional license): N50 billion
Merchant Banks: N50 billion
Non-interest Banks (National): N20 billion
Non-interest Banks (Regional): N10 billion
The CBN’s new definition of minimum capital—comprising only paid-up share capital and share premium—excludes reserves and retained earnings. This means most banks must raise new capital despite existing strong shareholder funds.
Strengthening the Financial System
The recapitalisation push aligns with the CBN Act of 2007, which mandates the apex bank to promote financial system stability. Analysts note that a robust banking system prevents economic disruptions such as reduced credit, weakened investment, and instability in monetary transmission.
Beyond recapitalisation, the CBN has reaffirmed its commitment to protecting depositors and ensuring a stable financial system.
“The CBN continues to monitor all financial institutions under its purview and has robust early-warning and risk-based supervision frameworks in place,” it said in a statement.
Deputy Governor, Corporate Services, Ms. Emem Usoro, underscored the importance of recapitalisation in Nigeria’s trillion-dollar vision.
“Banks must be sufficiently capitalised to fund, finance, and power the economy,” she said, calling for a collaborative approach across stakeholders.
Sector Performance and Resilience
Governor Cardoso noted that the sector remains stable, with key indicators reflecting strength:
Non-Performing Loan (NPL) Ratio: Within the prudential benchmark of 5%
Liquidity Ratio: Above the 30% regulatory floor
Recent Stress Test: Confirms systemic resilience
He also revealed that several banks have successfully raised capital through public offerings and rights issues, positioning the industry to better support MSMEs and priority sectors.
Industry Voices Back CBN’s Strategy
UBA Group Managing Director, Oliver Alawuba, described the recapitalisation as timely and necessary.
“The initiative enhances resilience, prepares banks for large-scale financing needs, and aligns them with global standards,” he said.
He stressed that Nigeria’s banking sector must scale up capital buffers to support key sectors like infrastructure, digital finance, energy, and manufacturing.
Currently, Nigerian bank assets represent only 11.97% of the country’s GDP, far below the 70–150% seen in advanced economies, a gap the CBN seeks to close.
Expanding Financial Inclusion
The CBN also aims to strengthen Other Financial Institutions (OFIs) such as Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs).
Plans include:
Model mortgage foreclosure laws
Integration with the Global Standing Instruction (GSI) platform
Enhanced development finance support for well-managed OFIs
Mergers, Governance, and Compliance
Director of Banking Supervision, Olubukola Akinwunmi, revealed that banks remain within prudential thresholds and are making progress in capital mobilisation. He acknowledged that mergers and acquisitions may become strategic options for some institutions.
Meanwhile, the CBN is tightening its compliance framework. Starting 2025, banks will be expected to refine their governance models to meet evolving risks. Recently, the CBN imposed N15 billion in penalties on 29 banks for breaches, including anti-money laundering violations.
“Beyond penalties, banks must address root causes. This marks a shift towards accountability and long-term regulatory effectiveness,” the CBN said.
Looking Ahead
The Cardoso-led CBN remains focused on building a banking sector capable of powering Nigeria’s economic growth. From recapitalisation and credit expansion to risk oversight and inclusion, the central bank is charting a new course for financial stability, development, and resilience.
