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Fitch Ratings has affirmed that Nigerian banks are making steady progress towards meeting the Central Bank of Nigeria’s (CBN) new capital requirements, a policy aimed at restoring capital buffers weakened by naira depreciation and laying a foundation for renewed financial sector growth.
The Tier 1 capital of Nigerian banks declined by 23.5% following the naira’s depreciation against the US dollar, as reported in Africa’s Top 100 Banks 2024. In response, the CBN issued a directive in March 2024 mandating all banks to recapitalise by Q1 2026. The revised minimum capital thresholds are: N500bn for international commercial banks, N200bn for national banks, and N50bn for regional banks. Merchant banks are expected to meet a N50bn threshold, while non-interest banks must raise N20bn (national) or N10bn (regional).
In tandem, the CBN directed Bureaux De Change (BDCs) to raise their capital to N2bn (Tier-1) or N500m (Tier-2), extending the compliance deadline to December 31, 2025. These reforms, regulators say, are pivotal to fortifying Nigeria’s financial architecture and aligning with global standards.
CBN Governor Olayemi Cardoso emphasised the strategic importance of bank recapitalisation to economic resilience and inclusive growth. “With stronger capital bases, banks can extend more credit to underserved markets, support MSMEs, and invest in financial technologies essential for broadening access,” Cardoso noted.
He affirmed that recapitalisation is crucial to realising Nigeria’s $1 trillion economic ambition, as it enhances banks’ ability to support critical sectors such as infrastructure, agriculture, and digital innovation.
The banking sector, Cardoso added, remains fundamentally sound. “The non-performing loan ratio stands within the prudential benchmark of 5%, while the liquidity ratio exceeds the 30% regulatory minimum,” he stated. “Recent stress tests have validated the sector’s resilience.”
Many banks, including through rights issues and public offerings, have already met or are on track to meet capital targets well ahead of the 2026 deadline.
UBA Group Managing Director, Oliver Alawuba, described the recapitalisation initiative as timely and forward-thinking. “It strengthens the financial system’s capacity to absorb shocks and positions it to finance both traditional and emerging sectors, including fintech, clean energy, and manufacturing,” he said.
He pointed to the gap between Nigeria’s banking sector and advanced economies, where bank assets often represent 70% to 150% of GDP—compared to just 11.97% in Nigeria in 2024. “The CBN’s directive helps bridge this disparity,” Alawuba stated.
In reinforcing regulatory compliance, the CBN recently partnered with Citi to host an Anti-Money Laundering (AML) workshop. The bank’s Special Adviser on Compliance, Ms. Shola Phillips, stressed the need for financial institutions to implement agile, technology-driven compliance solutions.
Siobhan Ni Ealaithe of Citi and Stephanie Bailey of Citi EMEA AML Risk Management underscored the significance of global standards in combating financial crime, warning that over $3 trillion in illicit funds circulate through global financial systems annually.
The CBN’s compliance push includes the rollout of the FX Global Code and intensified market surveillance. Cardoso reiterated that ethical standards and professionalism must be upheld across the financial ecosystem.
Beyond banks, the CBN aims to reposition Other Financial Institutions (OFIs), such as microfinance and mortgage banks, as key drivers of inclusion and productivity. Measures include the integration of OFIs into the Global Standing Instruction (GSI) platform and leveraging DFIs to scale credit delivery.
Cardoso concluded by praising Nigeria’s payments infrastructure, which he said rivals those of many developed countries. “We have long embedded innovations that others are just beginning to adopt.”
As Nigeria pursues a $1 trillion economy, the recapitalisation agenda serves as both a stabiliser and enabler—laying the groundwork for a financial sector that is robust, inclusive, and future-ready.
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