Nigerian Banks to raise N3tn to recapitalise

By Ologeh Joseph Chibu

Nigeria banks are set to raise approximately N3tn in the second phase of the Central Bank of Nigeria’s (CBN) recapitalisation mandate deal.

Since the directive’s launch, banks have collectively raised about N1.7tn, with the Securities and Exchange Commission (SEC) confirming that N1.68tn was secured through e-offerings in 12 applications by nine banks.

First Round Success
Several top lenders have made significant progress in strengthening their capital base:
• Access Holdings Plc: N351bn raised, surpassing CBN’s threshold.
• Zenith Bank: N350.4bn secured, also exceeding requirements.
• Guaranty Trust Holding Company (GTCO): N209.41bn raised.
• FCMB Group: N147.5bn secured.
• Sterling Bank & Jaiz Bank: N75bn and N10.04bn raised via private placements.
As of February, newly issued shares from Access Holdings, GTCO, FCMB Group, and Jaiz Bank have been successfully listed on the Nigerian Exchange (NGX), reinforcing investor confidence.

New Capital Raises in Progress
With the second phase now underway, four more banks plan to raise N931.91bn to meet CBN’s new capital requirements:
• Wema Bank: N200bn through a rights issue and private placement, launching April 1, 2025.
• Stanbic IBTC Holdings: N148.7bn rights issue, primarily for its banking subsidiary.
• FCMB Group: Increased its capital raise target from N150bn to N340bn.
• Fidelity Bank: Aiming to secure N243.19bn, after successfully tapping the market in mid-2024.
Additionally, tier-1 lenders United Bank for Africa (UBA) and FBN Holdings have completed rights issues worth N239.4bn and N150bn, respectively, pending regulatory approval.

Banking Stocks Outperform Market
Investor confidence remains high, with the NGX Banking Index surging 9.76% in January, outpacing the broader NGX All-Share Index’s 1.53% gain.
Top-performing banking stocks included:
• Wema Bank: +25.8% (N9.10 to N11.45).
• FCMB Group: +17.55% (N9.40 to N11.05).
• Stanbic IBTC Holdings: +11.71% (N57.60 to N64.35).
Analysts attribute the rally to strong financial results, with Afrinvest noting Zenith Bank (+11.2%) and Fidelity Bank (+11.1%) as key drivers of growth.

Path to Recapitalisation Compliance
The CBN’s deadline of March 2026 requires banks to meet new minimum capital thresholds:
• International banks: N500bn
• National banks: N200bn
• Regional & merchant banks: N50bn
So far, three banks have already met these requirements, while seven others successfully raised funds through public offerings in 2024, many experiencing oversubscriptions.

Experts predict that as recapitalisation efforts continue, Nigeria’s banking sector will emerge stronger, with higher profitability, enhanced liquidity, and sustained long-term growth.