N4.6trn Recapitalisation Fuels Intense Competition as Banks Eye Profitable Sectors

Nigeria’s banking industry is witnessing heightened competition following the successful recapitalisation of 33 banks, which collectively raised about N4.6 trillion ahead of the Central Bank of Nigeria’s deadline.

The exercise, driven by rights issues, public offerings, private placements and strategic investments, has significantly strengthened lenders’ balance sheets and positioned them for large-scale financing.

Under the new rules, international banks were mandated to hold at least N500 billion in capital—a 900% increase from the previous requirement. Major institutions exceeded expectations.

Access Holdings emerged as a frontrunner, raising N351.01 billion digitally and surpassing the benchmark with N600 billion in capital. Zenith Bank followed closely, lifting its capital base to N614.65 billion after raising N289.44 billion.

GTCO boosted its capital to over N504 billion and secured international funding through a dual listing, while Fidelity Bank recorded strong investor interest with oversubscription rates exceeding 200 percent in its public offer.

Other banks, including UBA, FCMB and First Bank, also consolidated their positions, while national and regional lenders relied on rights issues, mergers and parent-company support to meet targets.

The Providus-Unity Bank merger, backed by a N700 billion CBN intervention, underscored efforts to stabilise smaller players, while non-interest banks like Jaiz Bank, Lotus Bank and Taj Bank recorded notable growth.

Attention has now shifted to how effectively the funds will be utilised. Analysts warn that returns may initially dip due to increased equity levels.

According to Tunde Abidoye: “ROE declines in the first year of recapitalisation… 2026 performance would likely be depressed before rebounding.”

Experts recommend focusing on sectors such as ICT, real estate and oil and gas, while maintaining strict risk controls.

Shareholders remain cautious. Patrick Ajudua said: “The banks can only begin to generate returns once the CBN gives full clearance for utilisation of the funds.”

Boniface Okezie added: “There must be a gestation period, such as planting before harvest.”

The CPPE also stressed the need to prioritise the real sector. Dr. Muda Yusuf warned: “Private sector credit to GDP is still low… This shows a disconnect between banking system strength and economic productivity.”

He called for increased SME financing and long-term lending to drive growth.

As deployment begins, industry observers say the success of the recapitalisation will depend on how well banks convert capital strength into real economic impact while navigating inflation, risk exposure and regulatory constraints.

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