As the May 31, 2026, banking system recapitalisation deadline approaches, the Central Bank of Nigeria (CBN) has initiated a review of the capital plans of banks nationwide. Starting April 1, 2024, banks were mandated to submit their capital plans, outlining their financial strategies and projections for maintaining adequate capital levels. This process involves scrutinizing banks’ capital allocation, risk management, and financial stability strategies.
The CBN’s position was revealed on Wednesday during the unveiling of the Nigeria Banking Sector Report by Afrinvest Group in Abuja. CBN Governor Olayemi Cardoso, represented by the acting director of the financial policy and regulation department, Mr. Simon Onojah, emphasized the collaborative efforts between the CBN and banks in reviewing their capital strategies.
“We are currently working with the banks, reviewing their capital plans, and other activities relating to their capital base,” Onojah stated. “This initiative is part of a broader strategy to bolster the resilience of Nigerian banks and ensure a robust financial system.”
Cardoso also reassured of the CBN’s commitment to facilitating foreign direct investments, highlighting measures to protect foreign investors from devaluation losses. “We are working on policies to ensure that foreign direct investments are safeguarded, and investors do not suffer any devaluation loss,” he added.
The CBN’s collaboration extends beyond the banking sector, involving institutions like the NDIC, SEC, NGX, fiscal authorities, and the National Assembly to ensure the successful implementation of the recapitalisation exercise and maintain financial system integrity.
Enforcing stringent criteria for new shareholders, board members, and senior management is a priority for the CBN. “We will rigorously enforce our Fit and Proper Purchasing Criteria to ensure no illicit funds enter the system and that only qualified individuals take possession of Nigerian financial institutions,” Cardoso declared.
The recapitalisation initiative is also expected to yield significant returns for investors, with historical data showing high returns on investments in Nigerian banks. Cardoso noted, “Investments in Nigerian banks have historically yielded very high returns. Between 2010 and 2015, investments in bank shares yielded an average of 17 percent per annum.”
The recapitalisation exercise is crucial for the Nigerian government’s economic goals. “This strategy aims to further strengthen the resilience of Nigerian banks and promote a sound financial system. Importantly, it will support the government’s goal of achieving a GDP of $1 trillion by 2030,” Cardoso explained.
Before the report launch, Afrinvest Group Managing Director Ike Chioke analyzed the banking industry’s capital requirements, estimating a total funding gap of N4.1 trillion. “The entire banking industry needs an additional $3 billion to the N1.3 trillion they currently have as capital, requiring an additional N2.2 trillion,” Chioke detailed.
He also discussed the potential impact of mergers and acquisitions and the importance of paid-up capital and share premiums in addressing the capital gaps across different categories of banks.
The CBN’s review and recapitalisation efforts underscore a comprehensive approach to ensuring a stable and resilient banking sector in Nigeria.
News Editor 
Hyelsinta Hassan