Banking Reset: CBN’s Recapitalisation Ushers in a Stronger Era for Nigerian Banks
Nigeria’s banking sector is entering a defining phase as the Central Bank of Nigeria (CBN) pushes ahead with an ambitious recapitalisation programme designed to strengthen banks, restore confidence, and position the financial system to support long-term economic growth.
Under the leadership of CBN Governor Olayemi Cardoso, the reform is being framed not just as a regulatory requirement, but as a strategic reset aimed at building a safer, more resilient banking industry that aligns with global best practices .
What the recapitalisation drive is about
At its core, the recapitalisation exercise requires banks to raise fresh capital so they can better absorb shocks, protect depositors, and finance a growing economy. Analysts see the emergence of larger, better-capitalised banks as one of the most important outcomes of the programme.
The CBN has made it clear that Nigeria’s ambition of building a $1 trillion economy cannot be achieved without a solid financial backbone. That is why the apex bank is also pushing for better alignment between monetary and fiscal policy, alongside stricter supervision.
Progress so far: banks responding
With the March 31, 2026 deadline drawing closer, progress has been encouraging:
• About 20 banks have already met the new capital thresholds
• Several others are actively raising funds through rights issues and public offers
• Nigeria currently has 44 deposit-taking institutions, operating under international, national, and regional licences
Interestingly, some banks are now considering downgrading their licence categories — not as a sign of weakness, but as a strategic move to focus on profitable regions and consolidate operations, especially as digital banking reduces the need for wide physical presence .
Capital targets and the scale of change
The recapitalisation programme, announced in March 2024, gives banks a two-year window to comply. Minimum capital requirements now stand at:
• ₦500 billion for international banks
• ₦200 billion for national banks
• ₦50 billion for regional banks
By the end of the exercise, the banking sector is expected to raise about ₦4.14 trillion in fresh capital, making 2026 a landmark year for Nigeria’s financial system .
Governor Cardoso has repeatedly assured stakeholders that the CBN will closely monitor how these funds are raised and deployed, insisting on strong corporate governance and accountability.
️ Stronger rules, tighter oversight
Unlike past recapitalisation exercises that left banks cash-rich but risk-exposed, the CBN says lessons have been learnt.
This time, the focus is not just on raising money but on how that money is used:
• A redesigned credit-risk framework is being rolled out
• The Credit Risk Management System (CRMS) has been upgraded to a web-enabled platform
• Raised capital must pass through a rigorous verification process, jointly overseen by the CBN, SEC, and NDIC
The aim is to prevent reckless lending and break the boom-and-bust cycle that followed earlier banking reforms ⚠️.
Why recapitalisation matters now
Reports from firms like Deloitte point to mounting pressures on bank capital from inflation, high interest rates, exchange-rate volatility, and FX liquidity constraints.
Stronger capital buffers mean:
• Banks can take on bigger, long-term projects
• Loss-absorbing capacity improves during economic shocks
• Confidence from local and foreign investors is strengthened
This positions banks to fund infrastructure, manufacturing, agriculture, fintech, green energy, and other growth-driving sectors .
Vigilance alongside resilience
Despite the reforms, the CBN maintains that Nigeria’s banking system remains fundamentally sound:
• Non-performing loans remain within prudential limits
• Liquidity ratios are well above regulatory minimums
• Recent stress tests confirm sector stability
Still, the apex bank says it is staying alert to emerging risks such as cyber threats, operational weaknesses, and credit concentration, especially as it transitions toward Basel III standards.
️ Industry reactions
Industry leaders have largely welcomed the reforms. UBA Group Managing Director Oliver Alawuba described the recapitalisation as timely and necessary, noting that it equips Nigerian banks to withstand shocks and finance large-scale economic transformation.
According to him, recapitalisation is not just about compliance — it is about scale, sophistication, and readiness for a globally competitive economy.
What this means for Nigeria
As the recapitalisation deadline approaches, one message is clear:
Nigeria’s banking sector is being reshaped to become stronger, safer, and more capable of supporting growth.
If successfully completed, the reforms could:
• Improve credit access for MSMEs
• Strengthen investor confidence
• Reduce systemic risk
• Support Nigeria’s long-term economic ambitions
In short, the CBN’s recapitalisation drive signals a new era for Nigerian banking — one built on resilience, discipline, and sustainable growth ✨.
Nigeria’s banking sector is entering a defining phase as the Central Bank of Nigeria (CBN) pushes ahead with an ambitious recapitalisation programme designed to strengthen banks, restore confidence, and position the financial system to support long-term economic growth.
Under the leadership of CBN Governor Olayemi Cardoso, the reform is being framed not just as a regulatory requirement, but as a strategic reset aimed at building a safer, more resilient banking industry that aligns with global best practices .
What the recapitalisation drive is about
At its core, the recapitalisation exercise requires banks to raise fresh capital so they can better absorb shocks, protect depositors, and finance a growing economy. Analysts see the emergence of larger, better-capitalised banks as one of the most important outcomes of the programme.
The CBN has made it clear that Nigeria’s ambition of building a $1 trillion economy cannot be achieved without a solid financial backbone. That is why the apex bank is also pushing for better alignment between monetary and fiscal policy, alongside stricter supervision.
Progress so far: banks responding
With the March 31, 2026 deadline drawing closer, progress has been encouraging:
• About 20 banks have already met the new capital thresholds
• Several others are actively raising funds through rights issues and public offers
• Nigeria currently has 44 deposit-taking institutions, operating under international, national, and regional licences
Interestingly, some banks are now considering downgrading their licence categories — not as a sign of weakness, but as a strategic move to focus on profitable regions and consolidate operations, especially as digital banking reduces the need for wide physical presence .
Capital targets and the scale of change
The recapitalisation programme, announced in March 2024, gives banks a two-year window to comply. Minimum capital requirements now stand at:
• ₦500 billion for international banks
• ₦200 billion for national banks
• ₦50 billion for regional banks
By the end of the exercise, the banking sector is expected to raise about ₦4.14 trillion in fresh capital, making 2026 a landmark year for Nigeria’s financial system .
Governor Cardoso has repeatedly assured stakeholders that the CBN will closely monitor how these funds are raised and deployed, insisting on strong corporate governance and accountability.
️ Stronger rules, tighter oversight
Unlike past recapitalisation exercises that left banks cash-rich but risk-exposed, the CBN says lessons have been learnt.
This time, the focus is not just on raising money but on how that money is used:
• A redesigned credit-risk framework is being rolled out
• The Credit Risk Management System (CRMS) has been upgraded to a web-enabled platform
• Raised capital must pass through a rigorous verification process, jointly overseen by the CBN, SEC, and NDIC
The aim is to prevent reckless lending and break the boom-and-bust cycle that followed earlier banking reforms ⚠️.
Why recapitalisation matters now
Reports from firms like Deloitte point to mounting pressures on bank capital from inflation, high interest rates, exchange-rate volatility, and FX liquidity constraints.
Stronger capital buffers mean:
• Banks can take on bigger, long-term projects
• Loss-absorbing capacity improves during economic shocks
• Confidence from local and foreign investors is strengthened
This positions banks to fund infrastructure, manufacturing, agriculture, fintech, green energy, and other growth-driving sectors .
Vigilance alongside resilience
Despite the reforms, the CBN maintains that Nigeria’s banking system remains fundamentally sound:
• Non-performing loans remain within prudential limits
• Liquidity ratios are well above regulatory minimums
• Recent stress tests confirm sector stability
Still, the apex bank says it is staying alert to emerging risks such as cyber threats, operational weaknesses, and credit concentration, especially as it transitions toward Basel III standards.
️ Industry reactions
Industry leaders have largely welcomed the reforms. UBA Group Managing Director Oliver Alawuba described the recapitalisation as timely and necessary, noting that it equips Nigerian banks to withstand shocks and finance large-scale economic transformation.
According to him, recapitalisation is not just about compliance — it is about scale, sophistication, and readiness for a globally competitive economy.
What this means for Nigeria
As the recapitalisation deadline approaches, one message is clear:
Nigeria’s banking sector is being reshaped to become stronger, safer, and more capable of supporting growth.
If successfully completed, the reforms could:
• Improve credit access for MSMEs
• Strengthen investor confidence
• Reduce systemic risk
• Support Nigeria’s long-term economic ambitions
In short, the CBN’s recapitalisation drive signals a new era for Nigerian banking — one built on resilience, discipline, and sustainable growth ✨.