By Chinwendu Obienyi
As the Central Bank of Nigeria (CBN) presses ahead with its ambitious banking sector recapitalisation plan, two national banks are said to have entered into confidential merger talks in a bid to meet the regulatory deadline and remain competitive in the country’s fast consolidating financial sector.
Sources familiar with the matter told Daily Sun on Thursday that the two banks, which hold national banking licenses, have been in discreet discussions since the start of the second quarter of 2025.
“Merger talks are on the table and it’ll soon concretise,” the source noted.
The move, if successful, would create a stronger mid-tier institution capable of meeting the CBN’s new minimum capital requirement of N200 billion for national banks which will represent a significant leap from the previous threshold of N25 billion.
The CBN’s directive, issued in March 2024, gave banks a two-year window ending March 31, 2026, to comply with new capital thresholds: N500 billion for international banks, N200 billion for national banks, and N50 billion for regional banks. Also, the apex bank has ruled out any deadline extensions.
The recapitalisation is part of the CBN’s broader effort to build a more resilient and globally competitive banking sector capable of financing Nigeria’s ambitious $1 trillion GDP target by 2030. However, for many small- and mid-sized banks, the new requirements are said to present a serious challenge.
While some tier-1 and tier-2 banks are said to have hit the target set by the apex bank through public offerings, rights issues, and private placements, several smaller players, Daily Sun learnt, remain far off target.
Unlike their larger counterparts, the two banks who are in secret merger talks are reportedly reluctant to pursue public offers due to high regulatory costs, stringent Securities and Exchange Commission (SEC) disclosure rules, and investor hesitation amid macro-economic volatility.
Both institutions, according to sources who spoke to Daily Sun, are said to be assessing synergies, board structure, and shareholder alignment before making any formal announcements.
The source however cautioned that talks are still “in exploratory stages,” and a final agreement has not yet been guaranteed. Already, the CBN has already made it clear that banks who fail to meet the new capital requirements could face downgrades to lower license categories, possible revocation, or forced consolidation.
A Lagos-based financial analyst who did not want her name in print, said, “The fact that only a handful of banks have raised capital so far, despite the ticking clock, tells you this is heading for a merger wave. The next six to nine months will be defining for the structure of the banking industry.”
She further added that mergers are becoming an attractive alternative,” as some banks don’t have the shareholder base or market appetite to go it alone, hence joining forces is the more viable route.
Daily Sun had on Wednesday reported that the amount of capital shortfall facing commercial banks has narrowed to about N783.4 billion following the successful recapitalisation of Stanbix IBTC Holdings. Initially it stood at N964.8 billion.
For the Nigerian economy, a successfully recapitalised banking sector could unlock stronger credit growth, increase financial inclusion, and attract foreign investment.
However, mismanaged consolidations or regulatory delays could trigger short-term disruptions.
The CBN has assured stakeholders that it will provide technical guidance and fast-track approvals for qualified merger applications, while also tightening oversight to prevent regulatory arbitrage.
With the said date still miles away, industry watchers expect more clarity on which banks will remain standing, which will be swallowed up, and which will bow out altogether.
For now, all eyes will be on the two banks as they attempt to forge a new path quietly, but under the watchful gaze of the market and the regulator.