Nigerian Banks to Raise N4.14 Trillion in Recapitalization Exercise by 2026

Nigerian banks are undergoing a recapitalization exercise initiated by the Central Bank of Nigeria in April 2024 to enhance the financial system's resilience against macroeconomic shocks. The new framework requires banks to raise significant capital, with minimum capital requirements set at N500 billion for commercial banks with international licenses, N200 billion for those with national licenses, and varying amounts for other types of banks.

The move aims to address eroding capital adequacy due to economic pressures like high inflation, rising interest rates, and exchange rate volatility. So far, 27 banks have already raised capital through public offers or rights issues, with 16 banks meeting or exceeding the new capital thresholds.

This recapitalization is crucial for Nigerian banks to manage risks, improve liquidity, and withstand domestic and external shocks.