By Chukwuma Umeorah
Proshare has projected that Nigeria’s recapitalised Tier 1 banks will leverage their increased capital strength to deepen their footprint across Africa, accelerate technology adoption, and consolidate their dominance in financial services.
This outlook, shared in Proshare’s 4th edition of the Tier-1 Banking Sector Report in Lagos on Wednesday, suggests that larger equity bases will enable banks to pursue growth opportunities beyond Nigeria while enhancing risk management and operational efficiency.
While emphasizing that bigger banks are essential to achieving Nigeria’s $1 trillion economy goal, the report which assesses the evolving structure of Nigeria’s top banking institutions, argues that the increase in capital alone may not directly translate into higher lending volumes but will instead provide a stronger foundation for strategic expansion, operational efficiency, and risk mitigation.
“Bigger banks tend to support economies in a stronger manner,” said Managing Director and Chief Executive of Proshare, Teslim Shitta-Bey. “But the fact that banks have increased their capital does not necessarily translate directly into increased loans and advances. Banks don’t lend capital, they lend deposits.”
The report underscores that recapitalisation will equip banks with the resilience to withstand macroeconomic shocks and manage non-performing loans effectively, noting that the increased capital serves more as a risk buffer than an automatic trigger for lending expansion.
Proshare’s analysis identifies six institutions—Ecobank Transnational Incorporated (ETI), AccessCorp, FirstHoldco, Zenith Bank, UBA, and GTCO—as leading Nigerian banks based on its proprietary Bank Strength Index (PBSI), which aggregates metrics such as capital adequacy, asset quality, profitability, digital integration, and governance. The report further anticipates that Fidelity Bank, currently a Tier 2 institution, will attain Tier 1 status by the end of 2025.
Beyond domestic consolidation, the report anticipates a strategic shift in the operational scope of Nigerian banks, with Tier 1 banks increasingly exploring opportunities across East, Central, and Southern Africa, particularly in sectors such as mining, manufacturing, and digital services.
“We expect to see banks moving into greater territories in East and South Africa, especially in areas of mining and manufacturing,” Shitta-Bey said. “This de-risks their loan portfolios because they are not exposed to only Nigerian risk.”
Shitta-Bey also highlighted a likely wave of consolidation within Nigeria’s digital banking ecosystem. Venture capital-backed neobanks, which have focused on underserved markets such as rural communities and SMEs, may face acquisition by larger traditional banks under pressure to deliver shareholder value and diversify their operations.
“Quite a number of them will be acquired by their larger brothers,” Shitta-Bey noted. “That is not bad for the system. These Tier 1 banks will have a specific operation that understands customers and moves forward with them in a creative manner.”
On the technology front, the report projects increased adoption of artificial intelligence, blockchain, and cloud-based services as banks seek to streamline operations and improve credit evaluation processes. “We expect to see more AI applications. We expect to see things like decentralized ledger technology taking place,” he added.
Former Director at the Central Bank of Nigeria (CBN), Omolara Akanji, during a panel session at the report presentation, noted, “Digitalisation will have a more serious impact in the banking sector in the next 10 years. My concern is whether the Central Bank, as we know it today, is going to be at the speed of what is going on in the market.” She stressed the need for forward-looking regulatory frameworks to match the evolving complexity of bank operations.
On his part, Founder and Chief Consultant at Adedipe Associates, Dr. Biodun Adedipe, emphasized the deeper economic role of banks. “Yes, it’s good to pursue profit, but that must be balanced with how it connects what they do with the rest of the economy, especially in the real sector. The more connected they are to economic activities, the more money they make.”
Some stakeholders raised concerns about the readiness of the government and regulatory institutions to fully harness the outcomes of the ongoing recapitalisation exercise, which is expected to conclude by March 2025. They stressed that the initiative should be viewed not as a final objective, but as a pivotal moment to reposition the banking sector for sustained growth. To remain globally competitive and contribute meaningfully to national economic development,. they emphasized the need for Nigerian banks to adopt greater agility, innovation, and technological sophistication