The Real Test After Recapitalisation

Michael Oladejo

As of 20 April 2026, the public conversation should move on from whether banks can raise capital. That deadline ended on 31 March 2026. The harder question is what Nigeria does with the stronger balance sheets the recapitalisation exercise was meant to create.

Capital raising was never the destination. It was the precondition. Three facts now define the next phase. The CBN has now published an April 2026 sector-wide recapitalisation outcome. Current CBN guidance still points to weak credit flow into agriculture and other productive segments. And the policy response is increasingly aimed at pushing capital back into the real economy. That is the unfinished story behind recapitalisation.

What The Exercise Was Supposed to Achieve

On 28 March 2024, the Central Bank of Nigeria set the programme to produce stronger, healthier, and more resilient banks that could support the goal of a $1 trillion economy by 2030. The new thresholds were sharp. International commercial banks were pushed to N500 billion. National commercial banks moved to N200 billion.

Regional commercial banks moved to N50 billion. National merchant banks moved to N50 billion. National non-interest banks moved to N20 billion, while regional non-interest banks moved to N10 billion. The design was deliberate. For existing banks, the new minimum had to come from paid-up capital and share premium, not from recycled reserves or Additional Tier 1 capital.

According to a CBN press release, the recapitalisation programme has now been concluded. Nigerian banks raised a total of N4.65 trillion in fresh capital over the 24-month exercise. The CBN said 33 banks met the revised minimum capital requirements, with 72.55 per cent of the capital sourced locally and 27.45 per cent from international markets. It also said a limited number of institutions remained subject to ongoing regulatory and judicial processes, while all banks remained fully operational.

That aggregate update matters because it changes the debate. The issue is no longer whether the system could mobilise capital. It could. The issue now is what banks do with a stronger capital base. Recent filings show the starting point. GTCO’s audited 2025 results, released on 31 March 2026, showed shareholders’ funds of N3.4 trillion, a capital adequacy ratio of 43.8 per cent, and a net loan book of N3.13 trillion. FCMB said on 8 March 2026 that it had completed the capital raise programme for FCMB Limited and that

The proceeds were sufficient for the bank to meet the revised N500 billion minimum for an international banking licence, based on verified eligible capital of N266.5 billion as at 31 December 2025. Zenith’s 2025 annual report, published on 7 April 2026, showed share capital and share premium of roughly N614.6 billion. The unfinished part of recapitalisation is no longer capital raising. It is capital allocation.

Why Fresh Capital Is Still Not Reaching the Real Economy

Nigeria’s banks have often preferred safety when macro conditions turn uncertain. High rates, exchange rate pressure, and borrower stress make treasury assets and central bank placements look cleaner than long tenor private sector credit. If fresh equity only finances caution, recapitalisation improves resilience without lifting growth.

As at April 2026, the CBN’s agriculture page still says less than five per cent of banks’ credit goes to the sector. For a sector that employs a large share of the labour force and sits at the centre of food security, that single statistic is enough to show the allocation problem.

The issue is not whether the banking system can lend. GTCO’s 31 March 2026 results showed its net loan book still grew by 12.4 per cent in 2025. The issue is whether the system is deploying enough of its stronger capital into the productive parts of the economy that need it most.

The banking system does not need reckless expansion. It needs better distribution into productive segments that remain underserved, especially agriculture, export-oriented businesses, infrastructure-linked corporates, and well-run SMEs. These borrowers do not need softer standards. They need banks that can measure risk properly, structure facilities properly, and stay with the credit after disbursement.

That is the real policy test after recapitalisation. The system must become more willing, and more able, to take disciplined, productive risk.

Capital Efficiency Is the Real Post-Recapitalisation Test

This is the central post deadline issue. The next phase is about capital efficiency, not only capital adequacy. How much productive earning capacity does each naira of new equity create? Which sectors justify capital consumption? Which lending lines build durable returns rather than absorb balance sheet without strengthening the franchise?

Recapitalisation should not end in safer balance sheets parked in treasury assets, short-dated placements, and the most familiar low-risk names. Resilience matters. But the public purpose of stronger bank capital is to widen the system’s capacity to support agriculture, export businesses, infrastructure-linked corporates, and manufacturing value chains, and the better run end of the SME market without returning to weak underwriting.

The FCMB case is a useful reminder that recapitalisation was still a live process in March 2026, not a settled talking point. On 8 March 2026, the Group said it had completed the capital raise programme for FCMB Limited and had sufficient capital to meet the revised minimum for an international licence. That is what this exercise was for. The raise is completed. The next question is whether the stronger capital base will support additional productive risk assets on sensible terms.

Why Banks Still Avoid Productive SME and Long Tenor Corporate Risk

The hesitation is not irrational. Many productive borrowers still come with messy data, thin formal records, weak collateral perfection, volatile input costs, foreign exchange exposure, and recovery timelines that can easily outlast management patience.

For banks facing high funding costs and intense scrutiny on asset quality, short tenor and better collateralised exposures will usually win the internal capital allocation fight. Nigerian banks are lending. Some are lending aggressively. But productive credit is still not flowing with enough breadth, tenor, or confidence into the real economy.

The pattern remains too concentrated in segments that are easier to book, easier to secure, or easier to monitor. SMEs, mid-market corporates, infrastructure-linked businesses, agro-processing chains, exporters, and domestic manufacturers need credit structures that survive volatility. Too few banks can consistently price, monitor, and recover that risk well. Without that discipline, fresh equity will keep drifting toward caution instead of productive expansion.

Why Data and IFRS 9 Matter More Now

The next phase will be won or lost in data quality, provisioning discipline, and management information. Banks cannot deploy larger balance sheets safely with weak staging logic, incomplete collateral records, late exception reporting, or board packs built on inconsistent data. IFRS 9, Basel transition, and regulatory reporting are part of the credit engine.

From BST’s work with banks on IFRS 9, capital, and regulatory reporting, one lesson keeps returning: Capital does not fail first in the annual report. It fails earlier, in delayed signals, poor segmentation, weak overlays, manual reconciliations, and reporting that arrives too late for management to act. Banks lend with confidence when they trust their numbers. They hold back when they do not.

What Boards Should Demand Now

Boards and executive teams should now ask harder questions than they did during the capital raise. Which sectors can we underwrite with conviction? Where is risk adjusted return still attractive after funding cost, expected loss, and capital consumption? Which tenors are we structurally equipped to hold. What data gaps still distort our view of obligors? How quickly do early warning signals reach decision makers. Which business lines consume capital without building durable franchise value?

They should also ask whether treasury comfort is quietly replacing commercial judgement. A bank can satisfy ratios and still fail the economy if too much of its new balance sheet stays parked away from productive use. The right answer is better capital allocation, better pricing, better structure, better monitoring, and faster recognition when risk begins to turn.

Nigeria needs banks that can fund growth without returning to the old cycle of weak underwriting, delayed recognition, and post crisis repair. That is the real test after recapitalisation. The money has been raised in many cases. The harder work now is to use that capital eAiciently, direct it credibly, and prove that stronger balance sheets will translate into stronger support for the real economy.

• Oladejo is the CEO of BST Consulting Limited, which supports financial institutions across Africa, Europe, and Asia on risk, regulatory, IFRS 9, and reporting transformation.