Nigerian commercial banks have initiated efforts to raise capital in response to the Central Bank of Nigeria’s (CBN) updated capitalisation requirements. Tier-1 banks have collectively raised over ₦1 trillion through stock market activities, while smaller banks are contemplating mergers and acquisitions to meet the deadline set for March 31, 2026.
Several commercial banks, including Polaris and Keystone, are reportedly in the early stages of exploring potential mergers to address the new capital requirements imposed by the CBN. Polaris Bank, with a capital base of ₦50.43 billion according to its 2022 financial statements, will need to raise ₦150 billion to meet the new ₦200 billion capital requirement for national banks. Similarly, Keystone Bank is anticipated to encounter similar challenges due to the exclusion of retained earnings from qualifying capital.
Mergers have historically been a common strategy for banks to meet recapitalisation targets, and this trend is anticipated to continue. Recent developments include the approval of a merger between Unity Bank and Providus Bank by the CBN, resulting in the formation of a new entity with a balance sheet valued at up to ₦3 trillion. Credit ratings agency Moody’s foresees significant consolidation within the sector due to the new capital requirement rules.
The CBN’s emphasis on the need for stronger and more resilient banks aligns with Nigeria’s macroeconomic challenges and the goal of achieving a $1 trillion economy by 2030. Banks with larger capital bases will be better positioned to provide increased credit access to individuals and businesses. Major banks like Guaranty Trust, Access Bank, and Zenith Bank have already raised fresh capital to comply with regulatory requirements, demonstrating proactive steps towards meeting the new regulations.