Only 2 Nigerian Banks, Zenith, Access to Meet CBN's New Capitalisation Requirements ---- Fitch Ratings
An international rating agency, Fitch Ratings has said that only two Nigerian banks meet the Central Bank of Nigeria's, CBN's new capital requirements, noting that others still needed huge capital injections.
An international rating agency, Fitch Ratings has said that only two Nigerian banks meet the Central Bank of Nigeria's, CBN's new capital requirements, noting that others still needed huge capital injections.
It also doubted the likelihood of significant banking sector consolidation.
Fitch further noted that some of the banks were still in the process of raising capital, pointing out that only Zenith and Access Banks have met and exceeded their capital bases of N500 billion, ahead of the March 31, 2026, deadlines to raise capitals.
It however, stated that both Ecobank Nigeria and Jaiz Bank are very close to the finish line, even as Fidelity Bank and First City Monument Bank still had a long way to go to meet the required capital for their International Banking licence.
Fitch further noted that some of the banks were still in the process of raising capital, pointing out that only Zenith and Access Banks have met and exceeded their capital bases of N500 billion, ahead of the March 31, 2026, deadlines to raise capitals.
It however, stated that both Ecobank Nigeria and Jaiz Bank are very close to the finish line, even as Fidelity Bank and First City Monument Bank still had a long way to go to meet the required capital for their International Banking licence.
Fitch stated in part, that Fidelity and FCMB have concluded initial capital raising, but they “will need to raise more to maintain their international licences. As second-tier banks, they must raise significantly more capital relative to their balance sheets than larger banks. They have extraordinary general meeting approval for this, although they could consider downgrading to a national licence as they each have just one foreign subsidiary.
“Ecobank Nigeria Limited and Jaiz Bank needed only small capital injections to meet their requirements and have already achieved compliance.
“Ecobank Nigeria Limited and Jaiz Bank needed only small capital injections to meet their requirements and have already achieved compliance.
"We estimate that Ecobank is still in breach of its total capital adequacy ratio, CAR, requirement of 10 per cent but it has further capital-raising plans to restore compliance. Stanbic IBTC Holdings has launched a rights issue to raise capital to maintain its national licence
“Union Bank of Nigeria, UBN, which is also in breach of its 10 per cent CAR requirement, and third-tier banks have generally been slower to raise capital. Wema Bank has shareholder approval to raise enough capital to retain its national licence and plans to launch the process in April.
“Coronation Merchant Bank recently received board approval. It is not clear whether UBN and unrated third-tier banks have received the necessary approvals. M&A activity and licence downgrades remain more likely among third-tier banks.”
“Union Bank of Nigeria, UBN, which is also in breach of its 10 per cent CAR requirement, and third-tier banks have generally been slower to raise capital. Wema Bank has shareholder approval to raise enough capital to retain its national licence and plans to launch the process in April.
“Coronation Merchant Bank recently received board approval. It is not clear whether UBN and unrated third-tier banks have received the necessary approvals. M&A activity and licence downgrades remain more likely among third-tier banks.”
It also, further noted that most of the other banks were making significant progress in raising core capital to meet new paid-in capital requirements and were generally on track to meet the deadline, pointing out that, “this is supporting a recovery in capitalisation from the impact of naira devaluation, providing fuel for business growth.
“Fitch-rated banks have made notable progress towards compliance. Almost all have raised capital or formally launched the process to do so. Strong investor appetite has ensured that the vast majority of capital raisings so far have been successful, and most first- and second-tier banks should be able to meet their new capital requirements through capital raisings alone. Therefore, we believe the likelihood of banking sector consolidation among first- and second-tier banks has decreased.”
The rating agency further stated that the capital raisings were contributing towards recovery in capitalisation from the impact of naira devaluation, which put pressure on capital ratios and increased dollar credit concentration risks.
The rating agency further stated that the capital raisings were contributing towards recovery in capitalisation from the impact of naira devaluation, which put pressure on capital ratios and increased dollar credit concentration risks.
“Strengthened buffers over minimum CAR requirements will mitigate risks from a challenging operating environment, including regulatory intervention and further naira volatility, while providing room for business growth," it added.
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