Banks Maintain Strong Capital Position as Most’s CAR Steady above Regulatory Minimum

.GTCO leads with 43.82% adequacy ratio

.First Holdco remains below regulatory standard

Kayode Tokede

The Nigerian banking industry has continued to maintain a strong capital positions with average capital adequacy ratio (CAR) closing 2025 financial year above regulatory requirement.

This is with the exception of Guaranty Trust Holding Company Plc (GTCO), which closed 2025 with a Capital Adequacy Ratio of 43.82 per cent from 39.31 per cent in 2024.

CAR measures the financial soundness and shock-absorbing capacity of banks by comparing their capital to risk-weighted assets. A higher ratio indicates greater ability to absorb potential losses and protect depositors’ funds.

Recently, the Central Bank of Nigeria (CBN) disclosed that the Nigerian banking industry remained resilient, with most financial soundness indicators staying within prudential regulatory thresholds, affirming financial stability and institutional soundness. 

According to the report, the industry’s Liquidity Ratio (LR) stood at 63.38 per cent, compared with 57.22 per  cent in the preceding period, and was above the 30.00 per cent 

prudential threshold. 

“The development highlighted the strong capacity of the industry to meet near-term obligations and an enhanced financial intermediation. The CAR at 12.05 per cent remained above the 10.00 per cent regulatory minimum, underscoring robust solvency and resilience against credit and market 

risks. 

“Overall, the financial soundness indicators reaffirmed the sector’s resilience, robust capital adequacy, and sustained stability, strengthening confidence in its capacity to uphold financial system stability, “the report added.  

THISDAY investigation revealed that although most listed Tier1 banks recorded a decline in CAR in 2025, their adequacy ratio was well above the 15 per cent  CBN requirement.

For instance, GTCO reported CAR of 43.8 per cent; 2800 basis points above the regulatory minimum of 15 per cent, and 2700 basis points if adjusted for 1 per cent loss absorbency ratio.

“Tier 1 capital remained a very significant component of the Group’s CAR closing at 39.5 per cent, representing 90.1 per cent of the Group’s CAR of 43.8 per cent. Strong Capital generation and robust capital position provides the Group with the needed headroom required for future expansion and risk-taking,”GTCO explained in a presentation to investors and analysts.  

However, it was not all rosy as First Holdco reported CAR below industry regulatory threshold. First Holdco closed 2025 with CAR of 8.21 per cent from12.99 per cent in 2024.

The firm in its audited result and accounts for full year endeed December 31, 2025 said, “As at December 31, 2025, the group’s CAR was below the applicable regulatory minimum, stemming from our banking subsidiary. The group’s CAR had been restored  subsequently as at March 2026 through a capital remediation plan which included improved earnings from continuing operations for Quarter 1 2026, and capital injection.  This will further improve with the planned injection of additional Tier 1 capital of N200 billion into the banking subsidiary, and ongoing recoveries.”

The group had secured shareholders’ approval for a multi-tranche capital raising programme of up to N253.099 billion. This initiative was aimed to complement existing capital and accelerate the group’s pathway to a N1 trillion paid-up capital base, comprising share capital and share premium. The group had a successful capital raise of N83.7 billion and N45.0 billion through private placement completed in December 2025 and March 2026, respectively, alongside prior N149.6 billion rights issues and capital optimisation initiatives. 

Further investigation showed that Wema Bank Plc came close to GTCO with the highest CAR, closing 2025 at 28.05 per cent (above 10 per cent requirement of CBN) from 19.67 per cent reported in 2024.  

The management stated that its capital has been sensitised for Basel III compliance and found robust  enough to meet the requirements for additional capital for conservation and counter cyclical buffers. 

“Enhancing the capital position remains in focus as we expect to meet the new CBN capital requirement before the stipulated deadline,”the management explained.  

Zenith Bank was among other Tier1 DMBs that declared a decline in CAR last year. 

Zenith Bank Plc reported a CAR of 25.30 per cent in 2025 from 25.60 per cent in 2024 while United Bank for Africa Plc posted 23.20 per cent CAR in 2025 from 31 per cent in 2024.  

Another Tier1 bank, Access Holdings announced 18.78 per cent CAR in 2025 from 20.46 per cent reported in 2024.