By 
Nigerian bank stocks on the Nigerian Exchange Limited (NGX) reached a market capitalization of N7.91 trillion as of Friday’s close, fueled by renewed capital-raising efforts to meet new requirements set by the Central Bank of Nigeria (CBN).
This growth in value comes as a second round of banks prepares to raise funds to align with the CBN’s revised capital thresholds. The combined market cap of the 13 banks analyzed rose from N6.22 trillion on June 3, gaining N1.69 trillion — an increase of 27.19 percent — as recapitalization activities gained momentum.
The financial institutions in this analysis include United Bank for Africa (UBA), Zenith Bank, Access Holdings, FBN Holdings, Ecobank, and Fidelity Bank, among others. The list also features Guaranty Trust Holding Company (GTCO), Jaiz Bank, Sterling Financial Holding Company, Unity Bank, Wema Bank, FCMB Group, and Stanbic IBTC Holdings.
During the review period, banks in the N1 trillion market cap category expanded, with UBA and FBN Holdings joining GTCO and Zenith Bank in this segment.
Tunde Amolegbe, Managing Director of Arthur Stevens Asset Management Limited, confirmed that the recapitalization drive indirectly boosted bank market caps by improving investor confidence. “For banks raising additional capital, share prices have responded positively even though the capital-raising process is ongoing. This is because the market anticipates higher earnings potential tied to increased capital,” Amolegbe noted.
He also projected further growth in market cap once the recapitalization process completes, adding that “current price increases, rather than share volume, are driving capitalization growth. When the share issuance concludes, the number of issued shares will rise, contributing further to market cap growth.”
Similarly, Charles Sanni, CEO of Cowry Treasurers Limited, explained that while new shares are yet to be issued, bank performances are buoyed by increased profitability and interim dividends. “The recapitalization, though indirect, has a strong impact. Banks that raised capital are better positioned to grow business operations and drive additional earnings,” he said.
Last week, heightened demand for banking stocks led to a 7.86 percent weekly gain in the banking index, spurred by strong investor interest in UBA, FBNH, Access Holdings, and Stanbic. Analysts attribute this positive sentiment to robust nine-month earnings reports, giving investors optimism for year-end returns.
In March, the CBN set new capital requirements, mandating that commercial banks with international licenses meet a capital base of N500 billion, while those with national licenses must reach N200 billion. Regional banks need N50 billion, while non-interest banks are required to attain N20 billion and N10 billion for national and regional licenses, respectively. Banks are expected to meet these thresholds by March 31, 2026.
Only the paid-up capital and share premium portions of shareholders’ funds will be eligible to meet these requirements, excluding Tier 1 capital from the capital adequacy calculation, according to a CBN circular. Fidelity Bank launched the first capital raise with a N127.1 billion combined public and rights offer, which CEO Nneka Onyeali-Ikpe confirmed was oversubscribed.
Following Fidelity’s lead, tier-1 banks like GTCO, Zenith Bank, and Access Holdings have entered the market to raise additional funds. Sterling Financial Holdings Company recently launched a N153 billion rights issue after a successful $50 million private placement.
SEC Director-General Dr. Eromomotimi Agama noted strong demand for these offerings, stating, “The banks tapping the market have been fully subscribed, and in some cases, oversubscribed.” As the initial wave of recapitalization rounds concludes, several banks, including FBN Holdings, UBA, and Stanbic IBTC, are preparing to launch their capital-raising initiatives.
FBN Holdings, for example, plans to seek shareholder approval to raise approximately N350 billion at its next Annual General Meeting and recently initiated a N150 billion rights issue. Meanwhile, UBA’s CEO, at the IMF and World Bank’s 2024 Annual Meetings, ruled out mergers and acquisitions, stating that UBA would instead meet the recapitalization target independently and commence its process within weeks.
This capital expansion drive positions Nigerian banks to strengthen their financial bases, enabling them to explore new business opportunities and enhance shareholder returns.
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