Nigerian Banks Pursue Mergers, Capital Raises as CBN Deadline Looms
Major Nigerian lenders are exploring consolidation and completing capital raise programs ahead of the Central Bank of Nigeria's recapitalization deadline, with FCMB Group reaching N266.5 billion in verified eligible capital and South Africa's FirstRand eyeing market entry.
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Nigerian banks are accelerating merger discussions and capital raising efforts as the Central Bank of Nigeria's recapitalization deadline approaches, with the sector attracting $706 million in fresh foreign investments, according to reports from multiple banking sources.
FCMB Group announced completion of its capital raise programme for its banking subsidiary, with verified eligible capital reaching N266.5 billion as of December 31, 2025, comprising paid-up share capital and share premium, according to a statement by the bank's management reported by Peoples Gazette. The figure positions FCMB to meet CBN's minimum capital requirements for its banking license category.
Two major Nigerian banks are exploring merger talks ahead of the regulatory deadline, Legit.ng reported, though the institutions were not named. The potential consolidation comes as the sector faces pressure to meet the CBN's new capital adequacy thresholds, which vary by license type and require international banks to hold significantly higher capital buffers than regional or national operators.
South Africa's FirstRand, the continent's largest financial services group by market value, has revealed plans to enter the Nigerian market as part of its continental expansion strategy, Business Day reported. The move signals continued foreign interest in Nigeria's banking sector despite the recapitalization pressures facing domestic institutions.
The $706 million in foreign investments flowing into Nigerian banking represents a vote of confidence in the sector's fundamentals, even as lenders race to strengthen balance sheets. The CBN's recapitalization exercise, announced in 2024, aims to create a more resilient banking system capable of supporting Africa's largest economy. Banks failing to meet the deadline face potential license downgrades or forced mergers with stronger institutions.
Nigeria's banking sector holds approximately N50 trillion in total assets, with the top five banks controlling roughly 60% of industry deposits. The recapitalization drive follows similar exercises in 2005 and 2010 that reduced the number of banks from 89 to 25 through mergers and acquisitions.