Nigeria’s Banking System Emerges Stronger As CBN Concludes Historic Recapitalisation

The Central Bank of Nigeria (CBN) has formally concluded its 24-month banking sector recapitalisation programme, confirming that 33 of the country’s licensed banks have fully satisfied the revised minimum capital requirements introduced in March 2024. 

The programme, which required Nigerian banks to raise a combined N4.65 trillion in new capital, has been described by the apex bank as one of the most significant structural interventions in the country’s financial history.

In a statement issued on Wednesday, the CBN confirmed that all banks operating across Nigeria remain fully operational, with no disruption to customer services at any point during the 24-month exercise.

Depositors’ funds, the central bank emphasised, remain secure.

The CBN’s announcement confirmed that 33 banks have met the revised minimum capital requirements in full. 

A limited number of institutions, four banks,  remain subject to ongoing regulatory and judicial processes. 

The central bank was direct in its characterisation of these cases: they are being resolved through established supervisory and legal frameworks and do not represent systemic concerns.

Industry and legal sources familiar with the process described the outstanding matters as procedural in nature, regulatory and court processes that form a normal part of any complex, multi-institution compliance exercise of this scale. 

All four institutions continue to operate normally, processing transactions and serving customers without restriction.

The CBN has indicated that a full breakdown of banks by licence category, commercial, merchant, regional and non-interest, will be published on its website in due course, providing complete transparency on the outcome of the exercise across all tiers of the sector.

One of the defining features of the recapitalisation exercise, analysts have noted, is that it was executed without triggering any of the disruption that has characterised previous structural interventions in the Nigerian banking sector. 

Unlike the 2005 consolidation, which saw a significant number of bank failures and forced mergers under acute time pressure, the 2024–2026 exercise was designed to allow institutions to raise capital through a variety of mechanisms, rights issues, public offers, mergers and acquisitions, within a structured 24-month window.

The result, the CBN said, is a sector with strengthened capital adequacy ratios (CAR) that now exceed international Basel benchmarks. Minimum CAR thresholds remain at 10 per cent for regional and national banks and 15% for banks with international authorisation, requirements that align Nigeria’s banking supervision standards with those applied in major financial centres globally.

The recapitalisation was implemented in parallel with an orderly exit from the regulatory forbearance arrangements that had allowed some institutions to defer recognition of certain balance sheet risks.

That exit, now complete, means that the capital adequacy improvements confirmed by the CBN reflect genuine underlying financial strength, not a managed accounting picture.

The CBN said asset quality across the sector has improved as a result, reinforcing balance sheet transparency and the credibility of reported financial positions. 

For investors, analysts and counterparties assessing Nigerian banks, the significance of this is considerable: the numbers now say what they mean.

The apex bank added that its risk-based capital adequacy framework has been strengthened, with banks now required to conduct regular stress testing across defined scenarios and maintain appropriate capital buffers. 

This supervisory architecture, officials indicated, is designed to ensure that the capital gains secured through the recapitalisation are actively maintained, not merely achieved and held static.

For institutional observers, the most significant signal from Wednesday’s announcement may be less about the capital figures themselves and more about the quality of execution. 

A 24-month, sector-wide compliance programme, involving 37 licensed banks, capital raising equivalent to a substantial share of Nigeria’s financial system assets, and a simultaneous exit from regulatory forbearance, delivered without a single day of banking service disruption, represents a meaningful demonstration of regulatory and institutional competence.

The four banks still working through legal and regulatory processes are expected to conclude those matters in due course. The central bank’s supervisory framework has clear pathways for each scenario. The broader sector, by any measure, has cleared the bar that was set for it.

The CBN said it remains committed to a stable, transparent and resilient financial system that inspires confidence among depositors, investors and the broader public. 

With 33 banks fully compliant, all banks operational, and the supervisory architecture now reinforced, that commitment has, at least in structural terms, been given a considerably stronger foundation.