By Abubakar Yunusa
Nigerian banks are making significant strides in their ongoing recapitalisation efforts, with experts expressing confidence in their ability to meet new capital base requirements set by the Central Bank of Nigeria (CBN).
The CBN’s March 2024 directive revised minimum capital thresholds for banks, mandating a capital base of N500 billion for mega banks, N200 billion for national commercial banks, and N50 billion for regional commercial and merchant banks.
Non-interest banks face requirements of N20 billion (national) and N10 billion (regional). Banks have until March 31, 2026, to comply.
As of now, three banks have already met the new requirements, while seven others have launched public offers.
According to the Securities and Exchange Commission (SEC), Nigerian banks have raised N1.7 trillion in equity funds within seven months, underscoring the sector’s resilience and investor confidence.
Finance experts highlight strong investor interest, particularly from foreign portfolio investors, as a key factor bolstering recapitalisation efforts.
Foreign participation in the Nigerian stock market doubled in 2024, driven by the market’s attractive valuations. Analysts predict mid-tier banks, such as Polaris Bank, will achieve their targets with the backing of enthusiastic shareholders and investors.
Polaris Bank, recognized for its leadership in digital banking and MSME support, reported a 28% year-on-year increase in profit before tax in 2024. This performance highlights the sector’s overall resilience despite macroeconomic challenges.
The Nigerian Exchange (NGX) has played a pivotal role in supporting banks’ capital-raising efforts. The launch of NGX Invest, a digital platform for share offerings, has streamlined equity fundraising, attracting both domestic and global investors.
“The capital market has the global reach and technology to drive this recapitalisation exercise successfully,” said David Adonri, managing director of Highcap Securities.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, stressed that the quality of bank management, rather than size, will determine long-term success.
He called for early decision-making to prevent last-minute compliance rushes that could unsettle the market.
The recapitalisation is expected to strengthen Nigerian banks’ global competitiveness. Pius Olanrewaju, President of the Chartered Institute of Bankers of Nigeria, noted that the sector’s contributions to GDP growth—rising from 2.98% in Q1 2024 to 3.46% in Q3—highlight the success of ongoing reforms.
Sam Onukwue, chairman of the Association of Securities Dealing Houses of Nigeria, emphasized that the higher capital requirements are essential for Nigerian banks to compete in global markets and finance large-scale economic projects.
With over a year remaining before the compliance deadline, analysts are optimistic that the recapitalisation will position Nigerian banks for sustainable growth and enhanced global relevance.
Never miss a moment! Get the stories shaping Nigeria, delivered straight to your phone. Follow Peoplesdaily Newspaper on WhatsApp for breaking news, exclusive reports, and the headlines everyone will be talking about, before anyone else.
