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…As high inflation, FX volatility, keep investors cautious
Nigeria’s banks may have raised trillions of naira to meet the Central Bank of Nigeria’s (CBN) recapitalisation deadline, but that achievement alone will not lift their market value or convince investors to buy more bank stocks, according to a new report by financial intelligence firm Proshare.
The report said the banking industry has entered a new phase where success will no longer be measured by the amount of capital raised, but by how effectively banks use the fresh funds to grow profits, manage risks and deliver better returns to shareholders.
In its 2026 Tier-1 Banks Report, Proshare noted that 33 banks successfully met the CBN’s March 31, 2026 recapitalisation deadline, collectively raising about N4.65 trillion to strengthen their capital base.
While describing the exercise as a major milestone for the industry, the report stressed that recapitalisation is only the first step. It warned that Nigerian banks still face an uphill task in convincing investors that they deserve higher market valuations.
According to Proshare, Nigerian bank stocks continue to trade below those of their counterparts in South Africa, Morocco, Egypt and Kenya because investors remain concerned about the country’s economic challenges.
The report identified stubborn inflation, foreign exchange volatility, policy uncertainty and growing competition from fintech firms and international banks as major factors weighing on investor confidence.
It said investors are now paying less attention to how much capital a bank has and are focusing more on whether that capital is being used efficiently to generate sustainable profits.
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“The focus has shifted from capital adequacy to capital effectiveness,” the report stated.
Proshare explained that investors want to see banks with strong earnings, quality capital that can absorb losses, sound corporate governance and the ability to withstand inflation, exchange rate fluctuations and other economic shocks.
It added that banks capable of converting fresh capital into consistent profits, maintaining sustainable dividend payments and providing transparent financial reporting will be better positioned to attract investors and improve their market value.
The report urged regulators and investors to look beyond capital size by paying closer attention to the quality of banks’ capital, inflation-adjusted returns on equity, dividend sustainability and the consistency of financial disclosures.
As part of its assessment, Proshare introduced an upgraded Proshare Bank Strength Index (PBSI), which evaluates banks across 10 key performance areas and 25 indicators, with greater emphasis on how effectively banks deploy their capital.
The report concluded that the next battle in Nigeria’s banking industry will not be won by the institutions that raised the biggest capital, but by those that use the funds wisely, improve operational efficiency, strengthen governance and create lasting value for shareholders.
This version is written in a more conversational, newspaper-friendly style while retaining the key figures and findings.
