Banks brace for forced mergers amid recapitalisation deadline
Nigeria's banking sector is anticipated to experience a compelled series of mergers and acquisitions in 2026, as financial institutions rush to comply with the Central Bank of Nigeria's recapitalisation deadline.
SBM Intelligence reports that consolidation will likely shape the banking landscape in 2026, primarily due to capital deficiencies in certain areas of the industry.
The firm mentioned in its 2026 Outlook Report that “a compelled series of mergers and acquisitions will take place as a result of the banking recapitalisation deadline, with some banks failing to fulfill the requirements.”
In November 2025, Central Bank of Nigeria Governor Yemi Cardoso stated that 16 banks had fully satisfied the recapitalisation mandate.
While the CBN governor did not disclose the names of the banks, BusinessDay’s review indicated that three out of the seven banks with international licenses had already fulfilled the N500 billion minimum paid-up share capital requirement.
The banks confirmed to have met this threshold are Access Bank, GTBank, and Zenith Bank.
United Bank for Africa is also expected to surpass this requirement following its N157.8 billion rights issue.
For FCMB Group, the situation is still precarious, even with its recently concluded N160 billion public offer.
Even if the public offer achieves full subscription, FCMB would still need about N52 billion to meet the N500 billion standard.
The bank has, nevertheless, indicated plans to divest minority holdings in some of its non-banking subsidiaries to address the capital shortfall and finalize its recapitalisation process.
At Fidelity Bank, a private placement of 20 billion shares is still being considered.
Although shareholders approved the private placement in February 2025, the bank has yet to take significant actions to implement the plan.
First Holdco secured N150 billion through a rights issue in 2024, raising its share capital to N398 billion.
Market projections suggest that returns from the planned divestiture of FBNQuest Merchant Bank could be allocated towards the recapitalisation of First Bank of Nigeria.
Additionally, forced mergers are increasingly predicted among banks holding national licenses.
Among those with national licenses, Wema Bank, Globus Bank, Premium Trust Bank, Stanbic IBTC, and Standard Chartered have already complied with the N200 billion minimum share capital requirement.
Sterling Bank is awaiting regulatory approval to finalize its recapitalisation, with its N88 billion public offering expected to effectively cover its N43 billion capital deficit.
Within Sterling Holdco, its Islamic banking subsidiary, Alt Bank, is also progressing its capitalisation strategy.
Alt Bank initially secured a N5 billion capital boost from the N73.86 billion raised during Sterling’s 2024 rights issue.
Following the completion of Sterling Bank’s public offering, further capital injections into Alt Bank are anticipated.
The banking sector has already witnessed its initial significant consolidation, with Union Bank merging with Titan Trust Bank.
Based on available financial data, the combined share capital of these two banks is N177.3 billion, resulting in a N22.7 billion deficit.
However, this data is based on Titan Trust Bank’s 2021 records and Union Bank’s 2024 accounts, suggesting that the true capital situation may have shifted.
Providus Bank is set to merge with Unity Bank next.
Once this transaction is finalized, it is expected to form the ninth-largest bank in Nigeria in terms of asset size and branch network.
Some banks are choosing strategic reassessments instead of complete mergers.
For example, Nova Bank has opted to downgrade its license to a regional banking license, which has a lower minimum capital requirement of N50 billion.
Among Nigeria’s 14 national banks, the recapitalisation plans of Keystone Bank and Polaris Bank remain ambiguous, with no clear public information on how they plan to achieve the new capital requirements.
Aside from capital adequacy, SBM Intelligence anticipates that the Central Bank of Nigeria (CBN) will tighten regulations related to prudential standards, risk management, and anti-money laundering measures.
This aligns with the regulator’s broader objective of enhancing financial system stability and ensuring Nigerian banks conform to international supervisory standards.
In light of Nigeria's recent exit from the Financial Action Task Force Greylist, SBM expects the CBN to amplify its initiatives aimed at mitigating risks associated with illicit financial transactions and foreign exchange compliance.
Consequently, banks are likely to incur higher compliance and operational expenses, especially concerning transaction monitoring, reporting mechanisms, and senior compliance personnel.
Reflecting this trend, Jaiz Bank has recently appointed Tukur Galadima as its Chief Compliance Officer.
Galadima had previously held the position of Assistant Director at the Central Bank of Nigeria until 2024.
This appointment underscores the growing emphasis Nigerian banks are placing on regulatory knowledge as oversight becomes more stringent.
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