Key points
- Nigerian banks raised ₦4.65 trillion in fresh capital over two years.
- 72.5% of capital sourced locally, reflecting strong domestic investor confidence.
- 33 banks meet new capital requirements as CBN strengthens regulatory framework.
Main story
The Central Bank of Nigeria (CBN) has announced the successful completion of its banking sector recapitalisation programme, revealing that 72.5 per cent of the ₦4.65 trillion raised by deposit money banks was sourced from domestic investors.
In a statement, the apex bank said the 24-month programme, which commenced in March 2024, attracted robust participation from both local and international investors, with 27.45 per cent of the capital inflows coming from foreign markets.
According to the CBN, the exercise has significantly strengthened the resilience of Nigeria’s financial system, positioning banks to better support economic growth and withstand external shocks.
The Governor of the apex bank, Olayemi Cardoso, said the recapitalisation had reinforced the capital base of banks and enhanced their ability to absorb risks.
“The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth,” he said.
The CBN confirmed that 33 deposit money banks have met the revised minimum capital requirements under the programme, while a few institutions remain under regulatory and judicial review.
The issues
Nigeria’s banking sector has faced increasing pressure in recent years due to macroeconomic volatility, currency fluctuations and rising credit risks, necessitating stronger capital buffers.
Experts have also raised concerns over asset quality, regulatory forbearance and the need for improved transparency in bank balance sheets.
While the recapitalisation programme addresses these vulnerabilities, questions remain about the long-term sustainability of capital adequacy and risk management practices.
What’s next
The apex bank is expected to continue tightening regulatory oversight, including periodic reviews of prudential guidelines and governance standards across the banking sector.
Banks will also be required to maintain strong risk management systems and adapt to evolving economic conditions, while leveraging their strengthened capital base to expand lending and support economic activities.
Bottom line
With ₦4.65 trillion raised and most banks meeting new capital thresholds, the recapitalisation marks a significant milestone for Nigeria’s financial system, though sustained regulatory discipline and economic stability will be key to preserving these gains.
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