•Analysts project positive outlook for banking sector in H2
By Chinwendu Obienyi
Seven commercial banks are racing against time to plug a combined capital shortfall of N964.8 billion, as the Central Bank of Nigeria’s (CBN) recapitalisation deadline draws nearer, deepening investor scrutiny and market anxiety across the sector.
According to new disclosures and market data analysis, Fidelity Bank, FCMB, GTCO, UBA, First Bank Holding Company (FirstHoldco), Sterling Bank, and Stanbic IBTC are facing varying capital gaps under the apex bank’s revised regulatory thresholds.
The recapitalisation push, which aims to fortify the resilience of Nigerian banks amid rising macroeconomic pressures, is already reshaping boardroom strategies and investor relations, Daily Sun learnt on Monday.
Already, four banks as of first half (H1) of the year have fully completed their recapitalisation, meeting the CBN’s minimum capital thresholds. The 4 banks include AccessCorp (N351 billion), Zenith Bank (N350.5 billion), Ecobank (N147 billion) and Lotus (initially exceeded by N3 billion).
Cumulatively, about 7 banks have raised a total of N1.3 trillion which is 52.6 per cent of the estimated capital gap (N2.5 trillion) in the banking industry.
This means that the banks have yet to meet new apex bank’s capitalisation requirements. They include; Fidelity Bank whose funding gap stands at N194.4 billion, UBA with capital gap standing at N144.8 billion and FirstHoldco capital whose gap stands at N78.7 billion.
Others include; Sterling Bank (N70 billion), GTCO (N152.4 billion), FCMB (N233.8 billion) and Stanbic (N90.7 billion). Collectively, this stands at N964.8 billion.
The funding deficit figure reflect gaps between the banks’ current shareholders’ funds and the new minimum capital thresholds set by the CBN under its recapitalisation mandate unveiled earlier in 2024. Under the new framework, commercial banks with international, national, and regional licences must meet capital bases of N500 billion, N200 billion, and N50 billion respectively by the 2026 deadline.
While the shortfalls may appear daunting, analysts maintain that the overall health of the banking industry remains sound and the outlook for H2 2025 is positive.
Afrinvest in its report titled; H1’25 Macroeconomic Review and H2’25 outlook: Beyond Silver Linings; Statistical Gains, Social Strains,said, “The outlook for the banking sector remains broadly positive underpinned by expected earnings growth and ongoing balance sheet optimisation.
In H2’25, we anticipate further momentum as banks accelerate recapitalisation efforts which should bolster investors’ sentiment particularly within a more stable regulatory landscape”.
Banks are expected to meet the capital requirements through a mix of rights issues, private placements, mergers and acquisitions, and possible asset restructuring. Already, some lenders have approached institutional investors, while others have begun engagement with international partners.
The recapitalisation deadline is part of broader efforts by the CBN to stabilise the financial system in the face of inflationary headwinds, currency volatility, and rising non-performing loans.
Market watchers say how each bank navigates the capital race will reshape competition and redefine the pecking order within Nigeria’s banking landscape.
Partner, KPMG Nigeria, Temi Adedayo, said, “We anticipate some level of consolidation, especially among tier-2 and mid-tier banks. Banks that fail to close their funding gaps may become acquisition targets.”
The recapitalisation wave echoes a similar exercise carried out in 2005 under then-CBN Governor Charles Soludo, which saw the number of banks reduce from 89 to 25 through mergers and acquisitions.
As the market adjusts to the evolving dynamics, investors and regulators alike will be watching closely for how quickly these seven banks mobilise funds and at what cost in the final stretch toward 2026.