Nigerian banks on track to meet recapitalisation deadline — Fitch

International rating agency Fitch Ratings has indicated that Nigerian banks are on track to meet the March 2026 recapitalisation deadline set by the Central Bank of Nigeria.

This was disclosed in a non-rating commentary issued by the firm on Nigerian banks on Wednesday via its website.
In March 2024, the Central Bank directed banks to meet new minimum capital requirements by March 2026.

Under the new guidelines, commercial banks with international licences must hold N500bn in the capital, while national commercial banks require N200bn.

Regional commercial and merchant banks must meet an N50bn threshold. Banks have three options for compliance – equity injections, mergers, and acquisitions, or licence changes.

The rating agency stated that Fitch-rated banks have made notable progress towards compliance, as almost all have raised capital or formally launched the process to do so.

“Nigerian banks are making significant progress in raising core capital to meet new paid-in capital requirements and are generally on track to meet the end-1Q26 deadline. This is supporting a recovery in capitalisation from the impact of the naira devaluation, providing fuel for business growth. It also reduces the likelihood of significant banking sector consolidation.

“The two largest banks, Access Holdings and Zenith Bank are the first to secure enough fresh capital to meet the N500bn requirement for an international licence. First HoldCo, United Bank for Africa, and Guaranty
Trust Holding Company are taking a phased approach. They have recently raised capital and have shareholder approval to raise more to meet the N500bn requirement. First HoldCo’s and United Bank for Africa’s recent rights issues are awaiting final regulatory approval. Fidelity Bank and FCMB Group have completed initial capital raisings but will need to raise more to maintain their international licences.

“As second-tier banks, they must raise significantly more capital relative to their balance sheets than larger banks. They have extraordinary general meeting approval for this, although they could consider downgrading to a national licence as each has just one foreign subsidiary,” the commentary stated.

The rating firm noted that Ecobank Nigeria Limited and Jaiz Bank required only small capital injections to meet their requirements and have already achieved compliance.

“We estimate that ENG is still in breach of its total capital adequacy ratio requirement of 10 per cent, but it has further capital-raising plans to restore compliance. Stanbic IBTC Holdings has launched a rights issue to raise capital to maintain its national licence,” it said.

It maintained that strong investor appetite has ensured the vast majority of capital raisings so far have been successful, and most first- and second-tier banks should be able to meet their new capital requirements through capital raisings alone.

“Therefore, we believe the likelihood of banking sector consolidation among first- and second-tier banks has decreased.”

Union Bank of Nigeria, which is also in breach of its 10 per cent CAR requirement, and third-tier banks have generally been slower to raise capital. Wema Bank has shareholder approval to raise enough capital to retain its national licence and plans to launch the process in April.
Coronation Merchant Bank recently received board approval. It is unclear whether UBN and unrated third-tier banks have received the necessary approvals.

The agency reiterated that mergers and acquisitions, as well as licence downgrades, remain more likely among third-tier banks.