Banks Urged to Expedite Recapitalisation as Deadline Looms
With approximately three months remaining until the crucial deadline for banking sector recapitalisation, shareholder advocacy groups are intensifying their calls for action from financial institutions that have yet to meet the revised minimum capital requirements (MCRs). The minority investor community has voiced concerns that they stand to bear the brunt of any failures to comply with these new thresholds before the stipulated date.
The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, announced following the final Monetary Policy Committee meeting of 2025 that 16 banks have successfully achieved full compliance with the updated capital requirements, surpassing the deadline. During a presentation at the U.S.-Nigeria Executive Business Roundtable in Washington, D.C., this week, Cardoso reiterated the CBN’s commitment to ensuring a smooth conclusion to the recapitalisation exercise. He highlighted that Nigeria is in the advanced stages of a significant banking sector reform, intended to bolster financial stability, enhance lending capacity, and support the nation’s broader economic transformation.
Cardoso’s presentation, a copy of which was obtained, detailed the progress: “16 banks have already met or exceeded the new capital thresholds, while 27 have raised capital through public offers, rights issues, private placements, and mergers.”
While acknowledging the progress made and expressing optimism that the remaining banks will meet the MCRs, the minority shareholders’ representatives also harbour anxieties about potential negative impacts if some institutions falter.
Shareholder Perspectives on Recapitalisation Progress and Concerns
Moses Igbrude, National Coordinator of the Independent Shareholders Association of Nigeria, commended the efforts thus far. “The banks’ recapitalisation hurdle so far has been very impressive and encouraging, seeing about 16 banks crossing the hurdle. The most impressive part of it is how investors, especially the Nigerian investors, embraced and keyed in to the various offers that were made to the point of oversubscription. It is a sign that investors, both local and international, have strong confidence and believe in the Nigerian capital market.”
Igbrude expressed confidence that the remaining banks are in various stages of capitalisation. He noted the tiered licensing structure, suggesting that banks unable to meet the highest category could opt for lower licence tiers. For nationally owned banks, he proposed government recapitalisation via the CBN, followed by privatisation. “After the recapitalisation process, the FG should privatise them by selling 60 per cent to qualified core investors and the remaining 40 per cent to the Nigerian people to recover the money used to recapitalise them and list the shares on the floor of the NGX.”
Addressing banks lagging behind, Igbrude urged prompt action: “If there are banks that are not making headway, they should do so now through all available means, both private placement and mergers and acquisitions, or opt for the lowest licence available to avoid revocation of their licences. Let them not say there is still time. Let them make hay while there’s sunshine.”
Bisi Bakare, National Coordinator of the Pragmatic Shareholders Association, stressed the need for expediency. “The recapitalisation process is going on well so far, and according to CBN, only 16 banks have concluded their capital raising. It’s my opinion that as deadlines draw closer, banks should hasten up for merger, strategic realignment or be outrightly acquired by other strong banks rather than waiting for the CBN regulatory hammer, which would not work in their favour nor shareholders’ (investors’).”
Ayoola Gilbert, Chairman of the Ibadan Zone Shareholders Association, called upon the CBN to develop clear contingency plans to safeguard the financial system’s integrity as the deadline approaches. He emphasised the broader objectives of the policy beyond balance sheet figures, linking it to the CBN’s ambition of achieving a $1tn economy by 2030. The policy aims to foster banks resilient to economic shocks, capable of undertaking larger risks, and equipped to provide the substantial credit necessary for national projects and key sectors like Micro, Small, and Medium Enterprises (MSMEs).
Gilbert warned of the repercussions if a significant number of banks are still struggling in the final quarter of 2025: “the consequences will ripple through the entire financial ecosystem, directly impacting consumers, shareholder value and systemic trust.” He highlighted successful recapitalisations by institutions like Access Holdings, Zenith Bank, and Wema Bank, which raised substantial capital, as evidence of achievability and market reward. Gilbert urged bank boards and management to exhaust all options, including rights issues, private placements, and mergers, with urgency. He also implored the CBN to communicate a transparent contingency framework well in advance of the deadline, stating, “Knowing the rules of a potential orderly consolidation will do more to maintain confidence than a last-minute regulatory scramble.”
Boniface Okezie, Chairman of the Progressive Shareholders Association of Nigeria, expressed confidence that most banks would meet the deadline. He congratulated those that have succeeded but advised those that may fall short to proactively seek mergers and acquisitions. “That is the only way out for such banks; otherwise, they go into liquidation by the CBN, as happened recently to the two mortgage banks, Aso Savings and Union Homes. Unfortunately, it is only shareholders who are going to suffer for their inability to recapitalise.”
New Minimum Capital Requirements
The CBN has established new minimum capital thresholds for banks operating in Nigeria:
- Internationally Authorised Banks: N500 billion
- National Banks: N200 billion
- Regional Banks: N50 billion
- Non-Interest Banks: N10-20 billion
The ongoing recapitalisation drive is a critical step in strengthening Nigeria’s financial sector, with the success of this initiative expected to have far-reaching implications for economic growth and stability. Shareholder groups remain vigilant, advocating for transparency and robust contingency planning from the regulatory authorities and proactive engagement from bank management to ensure a favourable outcome for all stakeholders.
