Nigerian Banks to Raise Extra ₦900bn in 2025 Ahead of Recapitalisation Deadline
Nigerian banks are gearing up for a major cash boost as an additional ₦900 billion is expected to flow into the sector before the end of 2025. This comes as the Central Bank of Nigeria (CBN) recapitalisation deadline of March 2026 draws closer.
Key Highlights:
• Recapitalisation Push:
In March 2024, CBN raised the bar for bank capital requirements:
• International banks → ₦500bn minimum
• National banks → ₦200bn
• Regional banks → ₦50bn
• Non-interest banks → ₦20bn (national) / ₦10bn (regional)
• Progress So Far:
• By end of 2024, banks had raised ₦1.7 trillion.
• In the first 7 months of 2025, another ₦800bn was secured.
• Now, industry analysts forecast an extra ₦900bn before December 2025.
• So far, 8 banks have already met the capital requirement ✅.
• Investor Confidence:
Most of the capital raised came from domestic investors, showing Nigerians’ strong faith in their banks.
⚠️ Challenges for Banks:
• Profitability Strain:
• The termination of regulatory forbearance by CBN means banks must now fully classify and provide for bad loans.
• Non-performing loans (NPLs) could rise to 6.9% in 2025, compared to 5.2% last year.
• Profit before tax is projected to fall by 19.2% in 2025.
• Short-Term Pain, Long-Term Gain:
• 2025 may see weaker earnings due to higher loan provisions and fewer FX revaluation gains.
• But from 2026 onward, profitability is expected to bounce back strongly as the new capital is deployed.
CBN’s Tight Grip:
The apex bank is ensuring strict compliance:
• Banks that fell short have been barred from paying dividends, bonuses, or investing abroad.
• Each lender must submit a capital restoration plan detailing cost-cutting, risk management, and compliance measures.
• New rules require quarterly transparency on:
• Loan provisions
• Non-performing loans
• Capital adequacy ratios (CAR)
• Use of AT1 (Additional Tier 1) instruments
What This Means for Nigerians:
1. Stronger Banks: The recapitalisation drive should make banks more resilient against economic shocks.
2. Better Confidence: More capital means banks can lend more, boosting economic growth.
3. Short-Term Caution: With banks focused on compliance, credit may remain tight in 2025.
In summary, Nigeria’s banking sector is undergoing a massive shake-up. While 2025 may be tough on profits, the ₦900bn capital injection will set the stage for a stronger, more stable financial system by 2026.
Big Picture: Tough medicine today, stronger banks tomorrow!
Nigerian banks are gearing up for a major cash boost as an additional ₦900 billion is expected to flow into the sector before the end of 2025. This comes as the Central Bank of Nigeria (CBN) recapitalisation deadline of March 2026 draws closer.
Key Highlights:
• Recapitalisation Push:
In March 2024, CBN raised the bar for bank capital requirements:
• International banks → ₦500bn minimum
• National banks → ₦200bn
• Regional banks → ₦50bn
• Non-interest banks → ₦20bn (national) / ₦10bn (regional)
• Progress So Far:
• By end of 2024, banks had raised ₦1.7 trillion.
• In the first 7 months of 2025, another ₦800bn was secured.
• Now, industry analysts forecast an extra ₦900bn before December 2025.
• So far, 8 banks have already met the capital requirement ✅.
• Investor Confidence:
Most of the capital raised came from domestic investors, showing Nigerians’ strong faith in their banks.
⚠️ Challenges for Banks:
• Profitability Strain:
• The termination of regulatory forbearance by CBN means banks must now fully classify and provide for bad loans.
• Non-performing loans (NPLs) could rise to 6.9% in 2025, compared to 5.2% last year.
• Profit before tax is projected to fall by 19.2% in 2025.
• Short-Term Pain, Long-Term Gain:
• 2025 may see weaker earnings due to higher loan provisions and fewer FX revaluation gains.
• But from 2026 onward, profitability is expected to bounce back strongly as the new capital is deployed.
CBN’s Tight Grip:
The apex bank is ensuring strict compliance:
• Banks that fell short have been barred from paying dividends, bonuses, or investing abroad.
• Each lender must submit a capital restoration plan detailing cost-cutting, risk management, and compliance measures.
• New rules require quarterly transparency on:
• Loan provisions
• Non-performing loans
• Capital adequacy ratios (CAR)
• Use of AT1 (Additional Tier 1) instruments
What This Means for Nigerians:
1. Stronger Banks: The recapitalisation drive should make banks more resilient against economic shocks.
2. Better Confidence: More capital means banks can lend more, boosting economic growth.
3. Short-Term Caution: With banks focused on compliance, credit may remain tight in 2025.
In summary, Nigeria’s banking sector is undergoing a massive shake-up. While 2025 may be tough on profits, the ₦900bn capital injection will set the stage for a stronger, more stable financial system by 2026.
Big Picture: Tough medicine today, stronger banks tomorrow!