With less than a year until Nigeria?s banking recapitalization deadline, only seven banks have met or are on track to meet the new capital requirements. BusinessDay data reveals that commercial and non-interest banks must raise at least N2.47 trillion before the March 31, 2026 deadline.

Banks that have met the benchmark

Zenith Bank, Access Holdings, Ecobank Nigeria, and Lotus Bank have successfully met the new capital threshold. Meanwhile, Wema Bank, Stanbic IBTC, and Fidelity Bank are set to reach the mark once they complete their respective rights issues of N149.3 billion, N148.7 billion, and 20 billion private placement shares.

So far, 10 banks have raised or are in the process of raising N2.02 trillion through rights issues, public offers, and private placements.

Further review shows that Access Holdings raised N351 billion in a rights issue programme. Zenith Bank raised N350.46 billion in a hybrid rights issue and public offer. GTCO Holdings raised N209.4 billion in a public offer. Sterling Holdco has raised N103.8 billion from its private placement and rights issue. FCMB raised N144.6 billion in its public offer programme, while Fidelity Bank raised N175.85 billion from its hybrid rights issue and public offer.

Fidelity Bank is also conducting a private placement of 20 billion shares, potentially raising over N380 billion at its current share price of N19.05.

GTCO has yet to announce the second phase of its recapitalization plans. The group must raise at least N153 billion to retain its international banking license, with a rights issue being the most likely approach. Following its N240 billion final dividend payout for FY 2024, analysts posit that the bank is exploring the recapitalization of its earnings.

Smaller banks yet to act

Away from the banks that have commenced the recapitalization process, 14 smaller banks have yet to make any move. These banks, which are tier-2, tier-3, and non-interest banks, need to raise N1.6 trillion to meet the new minimum share capital requirements.

However, despite this lag, analysts note that Nigerian banks are on track to meet the Q1 2026 deadline. According to Fitch, there is a reduced likelihood of a banking sector consolidation.

Samuel Oyekanmi, a Research Associate with Norrenberger noted that the unquoted banks, there will still be attempts at private placements before talks of mergers.

?The tier-2, tier-3 banks that are not quoted, they will not put mergers forward first. They will try to as much as possible raise the monies through private placements,? He noted.

Currently, there is a bit of uncertainty with respect to the smaller banks and some of the older banks, such as Union Bank which has delisted from the stock exchange, as well as Polaris, Keystone, and Unity Banks.

Union Bank needs to raise N51.9 billion to reach the minimum capital requirement. However, the bank, which is also in breach of the 10 percent capital adequacy ratio, has been quite slow with the recapitalization move. Polaris Bank needs to raise N149.6 billion to keep its national banking license, however, no move has been made yet. Keystone Bank, which is now under the control of the Federal Government through the CBN, is under uncertain conditions.

Unity Bank is merging with Providus Bank, securing a N700 billion financial accommodation from the CBN. However, the new entity must raise N142.5 billion to retain its national banking license.

Meanwhile, tier-3 banks?including Globus Bank, Standard Chartered Bank, Nova Bank, Titan Trust Bank, Premium Trust Bank, Optimus Bank, and Citibank Nigeria?face uncertainty amid the ongoing recapitalization drive. Foreign-owned banks, such as Standard Chartered Bank and Citibank Nigeria, are in a stronger position, as their parent companies can provide financial support to ensure continued operations.

It is currently unknown if these banks have received board approval to launch their recapitalization plans. However, Fitch notes that M&A activity and license downgrades are highly likely among these tier-3 banks. (BusinessDay)

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