Meet Nigerian Banks Licensed to Operate Abroad: How They Met CBN N500bn Target
- Nigeria's Central Bank mandates N500 billion capital for international banks by March 2026 to boost financial stability
- Zenith Bank and Access Holdings lead the recapitalisation with successful capital raises ahead of deadline
- Recapitalisation reshapes Nigeria's banking landscape, posing risks of consolidation but strengthening the sector's resilience
Nigeria’s banking industry is undergoing its most ambitious overhaul in more than a decade as the Central Bank of Nigeria (CBN) enforces a sweeping recapitalisation programme aimed at strengthening financial stability and positioning the sector for long-term growth.
Under the policy, commercial banks with international banking licences must raise their minimum paid-up capital to N500 billion by March 31, 2026.
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The new thresholds, announced in March 2024, mark a sharp departure from the existing capital structure.
The CBN explicitly excluded retained earnings and other reserves, insisting that only share capital and share premium would count.
For internationally licensed banks, the directive has triggered aggressive capital-raising strategies and reshaped balance-sheet planning across the sector.
Nigerian banks with international banking licences
Banks holding international licences are permitted to operate across borders, maintain foreign subsidiaries, and participate in complex global transactions.
Currently, Nigeria’s internationally licensed lenders include Access Bank, Zenith Bank, United Bank for Africa (UBA), Guaranty Trust Bank (GTBank), First Bank of Nigeria, and Fidelity Bank.
Because of their systemic importance and cross-border exposure, the CBN expects these banks to maintain significantly stronger capital buffers.
This explains why the N500bn requirement applies only to international banks, while national and regional banks face lower thresholds.
How top banks scaled the N500bn capital requirement
Leading the recapitalisation race are Zenith Bank and Access Holdings, both of which crossed the N500bn mark well ahead of schedule.
Zenith leveraged its long-standing investor confidence and strong market valuation to raise fresh capital through rights issues, pushing its share capital and premium comfortably above the new benchmark.
Access Holdings followed a similar path, executing one of the largest capital raises in the market and consolidating its position as Africa’s biggest bank by customer base.
Its early compliance has strengthened investor perception and reduced regulatory pressure going forward.
Capital raising strategies used
Other international banks have adopted phased strategies. UBA launched a large rights issue that was heavily oversubscribed, lifting its capital base significantly and narrowing the gap to the N500bn target.
GTBank, after restructuring into a holding company, has also returned to the capital market, combining equity raises with balance-sheet optimisation.
Fidelity Bank, though a smaller player in this category, has relied on a mix of public offers and private placements to boost its capital position.
First Bank, Nigeria’s oldest lender, has pursued internal restructuring alongside planned capital injections to stay on course.
Across the board, banks have tapped domestic and foreign investors, betting on improved macroeconomic reforms, exchange-rate liberalisation, and stronger regulatory clarity.
Impact of recapitalisation on Nigeria’s banking sector
The recapitalisation drive is already reshaping Nigeria’s banking landscape. Stronger capital bases mean banks can absorb shocks from non-performing loans, currency volatility, and global financial tightening.
It also improves their capacity to fund large infrastructure projects, oil and gas transactions, and regional trade financing.
For the broader economy, well-capitalised banks are expected to support the government’s ambition of building a $1 trillion economy, particularly through increased credit to productive sectors and export-oriented businesses.
Consolidation risks and competitive shifts
However, the reform also carries consequences. Banks unable to meet the new requirements may be forced into mergers, acquisitions, or licence downgrades.
This could lead to fewer but stronger banks dominating the sector, intensifying competition among top-tier lenders.
There are also concerns that larger capital buffers may initially encourage conservative lending as banks prioritise balance-sheet protection over risk-taking.
A stronger, more resilient banking future
Overall, compliance by internationally licensed banks signals a turning point for Nigeria’s financial system.
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By meeting the N500bn threshold early, leading lenders are not only securing regulatory approval but also redefining competitiveness in the post-reform era.
As the 2026 deadline approaches, recapitalisation will remain a central force shaping Nigeria’s banking future.
"In the end, the Nigerian banking landscape will be studier and more robust to absorb global shock and play a pivotal role in the $1 trillion economy target by the Nigerian government," Osas Igho, a financial expert told Legit.ng during a call.
Ishaya Ibrahim, another financial expert, disclosed that the successful recapitalisation of the big banks has boosted investors' confidence in Nigeria's economy.
"We now have globally competitive banking industry that can withstand global shocks and effectively fund the economy," he said.
19 banks cross CBN’s recapitalisation hurdle
Legit.ng earlier reported that with fewer than 90 days to the Central Bank of Nigeria’s March 31, 2026 recapitalisation deadline, 19 banks have now met the new minimum capital requirements needed to retain their operating licences.
The latest additions are First Bank Nigeria, Fidelity Bank Plc and FSDH Merchant Bank, lifting the number of compliant institutions from 16 recorded last year.
Analysts say the pace of compliance is expected to accelerate, with more lenders likely to conclude their capital raising plans between next week and the end of January.
Source: Legit.ng
