Banking Sector Recapitalisation: Shareholder Groups Urge Action as Deadline Looms
With approximately three months remaining until the expiration of the banking sector recapitalisation deadline, shareholder advocacy groups are intensifying their calls for banks lagging behind to take decisive action. The push comes as concerns grow among minority investors about their potential exposure to significant losses should some institutions fail to meet the revised minimum capital requirements (MCRs) in time.
Recent statements from the Central Bank of Nigeria (CBN) indicate progress, with Governor Olayemi Cardoso announcing that 16 banks have already achieved full compliance with the enhanced capital thresholds. This update was shared during the final Monetary Policy Committee meeting of 2025 and further elaborated upon during a presentation at the U.S.-Nigeria Executive Business Roundtable in Washington, D.C.
Cardoso highlighted Nigeria’s commitment to a robust financial system, stating, “Nigeria is now in the final phase of its most significant banking-sector strengthening effort in over a decade. The recapitalisation programme is designed to safeguard financial stability, expand banks’ capacity to lend, and ensure the financial system is able to underpin Nigeria’s broader economic transformation.” He further noted that beyond the 16 banks that have met or exceeded the new capital thresholds, an additional 27 have successfully raised capital through various instruments, including public offers, rights issues, private placements, and mergers.
While this progress is viewed positively, the minority shareholders’ community expresses apprehension. They fear being disproportionately affected if a substantial number of banks are unable to secure the necessary capital before the deadline.
Shareholder Perspectives on the Recapitalisation Drive
Leaders within shareholder groups have voiced both commendation for the ongoing efforts and a strong sense of urgency for the remaining institutions.
Moses Igbrude, National Coordinator of the Independent Shareholders Association of Nigeria, acknowledged the impressive headway made, particularly noting the strong investor response.
- “The banks’ recapitalisation hurdle so far has been very impressive and encouraging, seeing about 16 banks crossing the hurdle. The most impressive part of it is how investors, especially the Nigerian investors, embraced and keyed in to the various offers that were made to the point of oversubscription. It is a sign that investors, both local and international, have strong confidence and believe in the Nigerian capital market.”
- Igbrude expressed confidence that most remaining banks are actively working towards compliance, suggesting that the tiered licensing structure (regional, national, and international) offers flexibility.
- For state-owned banks, he proposed government intervention through the CBN, followed by privatization.
- “As for the nationalised banks, the government should recapitalise them through the CBN, which is running them on behalf of the FG. After the recapitalisation process, the FG should privatise them by selling 60 per cent to qualified core investors and the remaining 40 per cent to the Nigerian people to recover the money used to recapitalise them and list the shares on the floor of the NGX.”
- He urged lagging banks to pursue all available avenues, including mergers and acquisitions or seeking lower-tier licenses, to avoid license revocation. “Let them make hay while there’s sunshine.”
Bisi Bakare, National Coordinator of the Pragmatic Shareholders Association, stressed the need for accelerated action.
- “The recapitalisation process is going on well so far, and according to CBN, only 16 banks have concluded their capital raising. It’s my opinion that as deadlines draw closer, banks should hasten up for merger, strategic realignment or be outrightly acquired by other strong banks rather than waiting for the CBN regulatory hammer, which would not work in their favour nor shareholders’ (investors’).”
Ayoola Gilbert, Chairman of the Ibadan Zone Shareholders Association, called for proactive contingency planning from the CBN.
- “This policy is not just about bigger numbers on the bank’s balance sheet. The CBN has positioned it as a foundational pillar for achieving a $1tn economy by 2030. The core objectives are to create banks strong enough to withstand domestic and global economic shocks while enabling banks to take on larger risks and provide the substantial credit needed to fund critical national projects and support key sectors like MSMEs. If a significant number of banks are still scrambling as of the fourth quarter of 2025, the consequences will ripple through the entire financial ecosystem, directly impacting consumers, shareholder value and systemic trust.”
- Gilbert pointed to successful recapitalisation efforts by major banks as proof of its attainability.
- “The successful banks like Access Holdings, Zenith Bank, and Wema Bank, which have raised hundreds of billions, demonstrate that recapitalisation is achievable and can be rewarded by the market. Their strength positions them to lead financing for Nigeria’s growth. As shareholders, we must urge the boards and management of our banks to exhaust every option, be it rights issues, private placements, or strategic mergers, with urgency. Simultaneously, we call on the CBN to communicate a clear, transparent contingency framework well before the deadline. Knowing the rules of a potential orderly consolidation will do more to maintain confidence than a last-minute regulatory scramble.”
Boniface Okezie, Chairman of the Progressive Shareholders Association of Nigeria, expressed confidence in most banks meeting the deadline but cautioned those who won’t.
- “I have no doubt that most banks will meet the deadline set out by their regulator, CBN. The banks that have made it, I congratulate them, but those that will not be able to make it, they should start early to look for banks that can absorb them by way of merger and acquisition. That is the only way out for such banks; otherwise, they go into liquidation by the CBN, as happened recently to the two mortgage banks, Aso Savings and Union Homes. Unfortunately, it is only shareholders who are going to suffer for their inability to recapitalise.”
New Capital Requirements
The CBN has established the following new minimum capital thresholds:
- Internationally Authorised Banks: N500 billion
- National Banks: N200 billion
- Regional Banks: N50 billion
- Non-Interest Banks: N10-20 billion
The success of this recapitalisation exercise is seen as crucial for enhancing the resilience of the Nigerian banking sector, enabling greater lending capacity, and ultimately supporting the nation’s broader economic transformation goals. Shareholder groups remain vigilant, advocating for transparency and a well-managed transition to safeguard investor interests and systemic stability.
