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Nigeria’s banking system remains fundamentally stable, sound and resilient, serving as a critical pillar of financial stability, according to the Central Bank of Nigeria (CBN). The apex bank says it is also maintaining vigilance against emerging risks as the ongoing recapitalisation programme gathers momentum.
CBN Governor, Olayemi Cardoso, noted that potential threats such as cyber risks, credit concentration and operational vulnerabilities are being addressed through strengthened risk-based supervision and the transition to Basel III, a move expected to further enhance resilience, improve capital quality and strengthen liquidity management.
At the 303rd Monetary Policy Committee (MPC) meeting in Abuja, members acknowledged the sustained strength of the banking system, with key financial soundness indicators remaining within regulatory thresholds. The committee also commended progress on recapitalisation, noting that 16 banks have already achieved full compliance with the revised capital requirements, and urged the CBN to ensure the programme’s successful conclusion.
With less than four months to the March 31, 2026 deadline, Cardoso said the exercise is firmly on track. Speaking at the Bankers’ Dinner in Lagos, he disclosed that 27 banks have raised capital through public offers and rights issues, with 16 already meeting or exceeding the new thresholds.
“As we strengthen the capacity of our banks, stress tests continue to confirm that the sector remains fundamentally robust, with financial soundness indicators comfortably meeting prudential benchmarks,” Cardoso said.
Strengthening governance and risk management
As part of efforts to safeguard the estimated N4.14 trillion being raised through recapitalisation, the CBN is redesigning the banking sector’s credit-risk framework. Cardoso said the new framework will enforce stronger governance, greater transparency and firmer accountability to prevent a repeat of past boom-and-bust cycles.
The apex bank has also established a fully operational Compliance Department covering financial crime supervision, market conduct, enterprise security, corporate governance and environmental, social and governance (ESG) standards.
According to the CBN, the upward revision of banks’ minimum capital—from N50 billion to as much as N500 billion depending on licence category—is essential to strengthen capital adequacy amid macroeconomic challenges such as inflation, currency volatility and forex constraints.
“The revision ensures banks can absorb shocks, take on larger risks and improve their liquidity position, ultimately enhancing their loss-bearing capacity,” the bank said.
Supporting Nigeria’s $1 trillion GDP ambition
The recapitalisation drive is seen as central to Nigeria’s ambition of achieving a $1 trillion Gross Domestic Product by 2030. Cardoso stressed that a well-capitalised banking sector is indispensable to funding large-scale investments and supporting economic expansion.
“Without decisive action, Nigerian banks will not have sufficient capital to support a $1 trillion economy. The ongoing recapitalisation is designed to prepare banks for expansion and attract big-ticket transactions needed for growth,” he said.
Announced on March 28, 2024, the two-year recapitalisation programme began on April 1, 2024. It sets minimum capital requirements of N500 billion for international commercial banks, N200 billion for national banks and N50 billion for regional banks, with similar thresholds for merchant and non-interest banks. Compliance ends on March 31, 2026.
Cardoso added that beyond financial stability, the policy is expected to drive inclusive growth by enabling banks to extend more credit to MSMEs, invest in technology and expand digital financial services, including mobile money and agent banking.
Key indicators remain strong
Under the new definition of minimum capital—limited to paid-up share capital and share premium—the CBN said most banks were required to raise fresh funds despite having shareholders’ funds above previous thresholds.
Nevertheless, the sector remains robust. The non-performing loan ratio is within the five per cent prudential benchmark, while liquidity ratios exceed the 30 per cent regulatory minimum. Recent stress tests have also reaffirmed the system’s strength.
CBN Deputy Governor, Corporate Services, Ms Emem Usoro, said recapitalisation is a critical component of the journey to a $1 trillion economy, stressing that banks must be adequately capitalised to finance a larger, more dynamic economy and compete globally.
Industry leaders have echoed this view. UBA Group Managing Director, Oliver Alawuba, described the policy as timely and essential, noting that it will strengthen banks’ ability to withstand economic shocks and finance long-term infrastructure and industrial projects.
Analysts say the recapitalisation drive aligns with the CBN’s statutory mandate to promote financial system stability, safeguard public confidence and support effective monetary policy transmission—key foundations for sustainable economic growth.
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