…Recapitalisation, profit pressure, foreign exits reshape continental banking
As global lenders retreat from Africa, some of Nigeria’s biggest banks have begun accelerating their expansion across the continent, using fresh capital raised from a recapitalisation drive to diversify earnings, manage risk and sustain profitability.
With higher capital buffers now in place, banks are reassessing how to deploy new funds at a time when earnings at home are normalising after two years of windfall boom.
For institutions with international licences, the continent is emerging as the natural destination — offering growth opportunities, improving margins and strategic space vacated by foreign competitors in the past decade.
“The recapitalisation exercise has forced banks to raise fresh capital, and the next question naturally is how they deliver value to shareholders,” said Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co. “One answer is to look beyond Nigeria. If your licence allows you to operate outside the country, why not explore those opportunities, especially where returns can enhance shareholder value?”
That thinking is increasingly shaping capital allocation decisions across the sector. At the Fitch on Nigeria 2025 forum in Lagos last November, Chukwukadubia Okoye, chief financial controller at United Bank for Africa (UBA), said lenders were prioritising regional growth. “On capital deployment, I see banks focusing on regional and market expansion,” he said.
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Domestic profit pressures drive diversification
The renewed continental push follows a shift in Nigeria’s operating environment. After two years of bumper earnings driven by naira devaluations and aggressive monetary tightening, profits at many large banks began softening last year as currency volatility eased and interest rates peaked.
Many banks benefited heavily from reforms introduced in mid-2023 and early 2024, which saw the naira sharply devalued. The Central Bank of Nigeria (CBN) data show the average official exchange rate rose to N1,450/$ in 2024 from N645.10/$ in 2023.
In the first eight months of 2025, the naira traded between N1,500 and N1,600/$ before strengthening to N1,480.3/$ by late September. On January 19, 2026, it closed at N1,419.3/$.
The CBN also raised the Monetary Policy Rate (MPR) by 875 basis points to 27.5 percent between July 2023 and May 2025, boosting interest income across the sector. That cycle turned in September, when the apex bank cut rates by 50 basis points for the first time since 2020 and has maintained the rate in November.
The policy pivot coincided with a marked earnings slowdown. A BusinessDay analysis shows Guaranty Trust Holding Company (GTCO), Zenith, First HoldCo and Access Holdings recorded a combined after-tax profit of N2.49 trillion ($1.64 billion) in the first nine months of last year, down from N3.07 trillion ($1.94 billion) in the same period of 2024.
UBA posted modest growth of 2.3 percent, well below its 17 percent expansion a year earlier.
Recapitalisation strengthens balance sheets
In March 2024, the CBN raised minimum capital requirements, compelling banks to comply through equity injections, mergers or licence reclassification. International banks must now hold N500 billion ($345 million), national banks N200 billion ($138 million) and regional banks N50 billion ($34.5 million) by March 2026.
By January 2026, about 22 banks — including all Tier-1 lenders — had met the new thresholds. According to Agusto & Co., the sector raised N1.7 trillion ($1.15 billion) in 2024 and another N800 billion ($523 million) in the first seven months of 2025.
“Banks are trying to deploy capital more efficiently to generate stable and sustainable returns as Africa’s most populous nation remains a volatile market,” said Mobifoluwa Adesina, an investment research analyst at Afrinvest West Africa, adding that expansion across Africa helps spread risk.
Read also: How Nigeria’s big banks scaled recapitalisation hurdle ahead March
Access and Zenith expand continental footprints
Among Nigeria’s international banks, Access and Zenith are leading the African expansion drive.
The country’s biggest bank by assets, Access raised N351 billion ($242 million) in December 2024, becoming the first lender to meet the N500 billion threshold.
Zenith followed in January 2025, raising N350.4 billion ($242 million) and lifting its paid-up capital to N614.6 billion ($425 million).
For both banks, recapitalisation has reinforced an existing strategy: reducing dependence on Nigeria by scaling African and international operations.
Access Holdings’ latest investor presentation shows Nigeria’s contribution to group pre-tax profit fell to 37 percent in the first nine months of last year from 61 percent in the same period of 2023. Last year’s figure was the lowest in at least three years.
Earnings from other African subsidiaries rose to 35 percent, while the UK and other international operations contributed 28 percent.
On the balance sheet, Africa’s share of group assets climbed to 21 percent from 12 percent, while international assets rose to 32 percent from 13 percent. Nigeria’s share dropped to 47 percent from 75 percent.
“Given the exposure of its business to Nigeria’s macroeconomic environment, Access is deliberately diversifying its income base,” Olubunmi of Agusto & Co said, noting that operating in countries with stronger sovereign ratings helps lower overall risk.
Nigeria’s fading dominance in group earnings
Nigeria, long the dominant profit engine for Nigerian banks, is gradually ceding ground. In April last year, Roosevelt Ogbonna, managing director and CEO of Access Bank Nigeria, told investors that the group had invested about $1.2 billion across subsidiaries.