Nigerian banks on observe to satisfy recapitalisation deadline — Fitch

Worldwide score company Fitch Scores has indicated that Nigerian banks are on observe to satisfy the March 2026 recapitalisation deadline set by the Central Bank of Nigeria.

This was disclosed in a non-rating commentary issued by the agency on Nigerian banks on Wednesday by way of its web site.
In March 2024, the Central Financial institution directed banks to satisfy new minimal capital necessities by March 2026.

Underneath the brand new tips, industrial banks with worldwide licences should maintain N500bn within the capital, whereas nationwide industrial banks require N200bn.

Regional industrial and service provider banks should meet an N50bn threshold. Banks have three choices for compliance – fairness injections, mergers, and acquisitions, or licence modifications.

The score company acknowledged that Fitch-rated banks have made notable progress in the direction of compliance, as nearly all have raised capital or formally launched the method to take action.

“Nigerian banks are making vital progress in elevating core capital to satisfy new paid-in capital necessities and are usually on observe to satisfy the end-1Q26 deadline. That is supporting a restoration in capitalisation from the affect of the naira devaluation, offering gasoline for enterprise progress. It additionally reduces the probability of serious banking sector consolidation.

“The 2 largest banks, Entry Holdings and Zenith Bank are the primary to safe sufficient recent capital to satisfy the N500bn requirement for a global licence. First HoldCo, United Financial institution for Africa, and Warranty
Belief Holding Firm are taking a phased method. They’ve not too long ago raised capital and have shareholder approval to lift extra to satisfy the N500bn requirement. First HoldCo’s and United Financial institution for Africa’s current rights points are awaiting last regulatory approval. Fidelity Bank and FCMB Group have accomplished preliminary capital raisings however might want to elevate extra to keep up their worldwide licences.

“As second-tier banks, they need to elevate considerably extra capital relative to their stability sheets than bigger banks. They’ve extraordinary common assembly approval for this, though they might take into account downgrading to a nationwide licence as every has only one international subsidiary,” the commentary acknowledged.

The score agency famous that Ecobank Nigeria Restricted and Jaiz Bank required solely small capital injections to satisfy their necessities and have already achieved compliance.

“We estimate that ENG remains to be in breach of its complete capital adequacy ratio requirement of 10 per cent, but it surely has additional capital-raising plans to revive compliance. Stanbic IBTC Holdings has launched a rights problem to lift capital to keep up its nationwide licence,” it stated.

It maintained that sturdy investor urge for food has ensured the overwhelming majority of capital raisings up to now have been profitable, and most first- and second-tier banks ought to be capable of meet their new capital necessities by capital raisings alone.

“Subsequently, we consider the probability of banking sector consolidation amongst first- and second-tier banks has decreased.”

Union Bank of Nigeria, which can be in breach of its 10 per cent CAR requirement, and third-tier banks have usually been slower to lift capital. Wema Bank has shareholder approval to lift sufficient capital to retain its nationwide licence and plans to launch the method in April.
Coronation Merchant Bank not too long ago acquired board approval. It’s unclear whether or not UBN and unrated third-tier banks have acquired the required approvals.

The company reiterated that mergers and acquisitions, in addition to licence downgrades, stay extra probably amongst third-tier banks.