Nigeria’s banking sector continued to tread cautiously last week as institutions prepared for the March 31, 2026 recapitalisation deadline set by the Central Bank of Nigeria (CBN). Activity was relatively subdued, with attention focused on banks undergoing capital validation and confirmation.
FCMB Group is currently under CBN review to determine if it has met its recapitalisation target. Analysts say a shortfall could push the lender toward a private placement with strategic investors, while a positive outcome would pave the way for a compliance announcement.
Sterling Bank remains under watch as investors await clarity on its recapitalisation strategy. With capital standing at ₦167bn against the ₦200bn requirement, market expectations point to either a rights issue or private placement.
GTCO Plc moved decisively last week, raising ₦10bn through a private placement of 125 million shares at ₦80 each, fully subscribed by a single investor. Market watchers interpret the move as proactive capital optimisation, aimed at strengthening buffers and positioning the bank for growth rather than meeting regulatory minimums.
Meanwhile, First HoldCo Plc’s unaudited 2025 results revealed significant impairment charges that weighed on earnings, revealing the strain of asset quality challenges. Analysts note the results highlight the importance of early capital planning and strong governance as regulatory pressures mount.
Beyond individual balance-sheet moves, speculation grew around possible mergers between tier-1 banks and bank-led investments in Nigeria’s energy infrastructure. Though unconfirmed, such developments point to growing interest in diversification.
The recapitalisation narrative was broadened by the CBN’s latest Fintech Report, which emphasised the sector’s role in financial inclusion and innovation, while warning of funding constraints. For banks, the findings reinforce the need to balance competition with fintechs against partnership opportunities.
Progress Across Institutions
- Union Bank: Foreign investment interest, particularly from the UAE, with legal disputes nearing resolution.
- Keystone Bank: Local consortium and foreign investors showing interest, though capacity concerns persist.
- Polaris Bank: Expected to pursue recapitalisation through merger, with Wema Bank tipped as a possible partner.
CBN appears receptive to mergers and acquisitions as a pathway to stronger institutions, especially for banks with weak shareholder funds.
Other Key Developments
- FirstBank (subsidiary of First HoldCo): Confirmed compliance with ₦500bn minimum capital requirement after rights issue, private placement, and divestment proceeds.
- Access Holdings Plc: Raised ₦594.90bn in recapitalisation exercise.
- Sterling Financial Holdings: Secured ₦88.07bn via public offer to strengthen Sterling Bank and fund expansion.
- UBA: Raised ₦157.84bn in additional capital, awaiting SEC and CBN approval.
- Standard Chartered Bank Nigeria: Confirmed compliance with ₦200bn minimum capital requirement.
With less than two months to the deadline, most tier-1 and tier-2 banks have met revised capital buffers, while tier-3 institutions face mounting pressure to avoid forced mergers and remain competitive in the post-recapitalisation landscape.
