As the Central Bank of Nigeria’s (CBN) new recapitalization deadline draws closer, pressure is mounting on several Nigerian banks, including United Bank for Africa (UBA) and Union Bank, to shore up their capital positions amid tightening regulatory scrutiny and challenging market conditions.
Recall that in March 2024, the CBN unveiled a sweeping recapitalization programme aimed at strengthening the financial system, improving banks’ capacity to absorb shocks and positioning the sector to better support economic growth. Under the new framework, international commercial banks are required to raise their paid-up capital to ₦500 billion, national banks to ₦200 billion, and regional banks to ₦50 billion, with compliance expected by March 31, 2026.
Uneven Progress Across the Sector
While a number of top-tier lenders have either met or are close to meeting the new thresholds through rights issues, public offers and private placements, progress has been uneven across the industry. Market data and industry reports indicate that only a portion of Nigeria’s commercial banks have fully complied, leaving several major players racing against time.
FirstBank, Nigeria’s oldest lender by history and one of its largest by assets, is still working to close a significant capital gap despite earlier balance sheet strengthening efforts. Analysts say the size of its operations makes the ₦500 billion requirement particularly demanding, requiring sustained access to investor capital.
UBA, with operations across Africa and beyond, has also embarked on capital-raising initiatives, including rights issues. However, sources indicate that the bank is yet to completely meet the fresh paid-up capital requirement, underscoring the scale of funding needed by banks with international footprints.
For Fidelity Bank, a mid-tier lender that has grown aggressively in recent years, the challenge lies in bridging the gap between its current capital base and the new regulatory floor. Though the bank has taken steps to raise funds, it remains short of full compliance, according to industry watchers.
Union Bank, which recently merged with Titan Trust Bank, is exploring strategic options, including attracting a core investor, as part of efforts to strengthen its capital position. Analysts note that mergers and acquisitions could become a more common route for banks struggling to raise sufficient capital independently.
The Central Bank of Nigeria (CBN) said the bank recapitalisation exercise is progressing steadily, with 16 banks already meeting the new capital requirements ahead of the March 31, 2026 deadline. Another 27 banks have also raised capital through various channels as the sector moves toward one of the most extensive reforms since 2004.
Governor Olayemi Cardoso disclosed the development on Tuesday in Abuja while briefing journalists at the end of the Monetary Policy Committee (MPC) meeting. He described the exercise as orderly and consistent with the regulator’s expectations.
“We are monitoring developments, and indications show the process is moving in the right direction,” he said.
Banks that have reportedly met the threshold include Access Bank, Zenith Bank, GTBank, Wema Bank, Jaiz Bank, and Stanbic IBTC.
Market Headwinds and Strategic Choices
Bankers and analysts point to a mix of factors slowing compliance. Raising hundreds of billions of naira in fresh equity has proven difficult in a market grappling with liquidity constraints, investor caution and broader macroeconomic uncertainties. Unlike previous recapitalization exercises, the CBN has made it clear that only fresh paid-up capital qualifies, excluding retained earnings and reserves, raising the bar significantly.
As a result, banks are pursuing varied strategies: rights issues, public offers, private placements, asset sales, and, in some cases, discussions around consolidation or license downgrades. The coming months are expected to be decisive, as lenders weigh the cost of capital against strategic restructuring options.
A Defining Moment for the Industry
Regulators insist the recapitalization drive is necessary to build a more resilient banking system capable of funding large-scale projects and withstanding economic shocks. For banks yet to meet the threshold, however, the deadline represents a defining test of investor confidence and strategic agility.
With time running out, FirstBank, UBA, Fidelity, Union Bank and several others face an urgent task: convince investors, raise fresh capital and align with the CBN’s vision or risk being forced into mergers, restructuring or strategic downsizing as Nigeria’s banking landscape undergoes another major transformation.
