After Recapitalisation, CBN Sets Another Tough Test, Deadline For Access, UBA, Zenith, Other Banks
- Nigerian banks face critical stress tests starting April 1, 2026, per Central Bank directive
- New risk-based capital framework shifts focus from size to resilience under pressure
- Compliance is mandatory; banks must submit reports by April 30 to avoid sanctions
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Barely after completing a sweeping recapitalisation exercise, Nigerian banks are now staring down another critical hurdle.
The Central Bank of Nigeria (CBN) has directed all deposit money banks, including major players like Access Bank, United Bank for Africa, and Zenith Bank, to conduct comprehensive stress tests starting April 1, 2026.
Source: Getty Images
The results of these tests must be submitted no later than April 30, 2026, in what analysts describe as one of the most consequential regulatory deadlines in recent years.
The directive signals a decisive shift in how Nigeria’s banking sector will be assessed, moving beyond capital size to the quality and resilience of that capital under pressure.
From capital size to risk sensitivity
At the heart of the new directive is a transition to a risk-based capital framework. Traditionally, banks were required to meet fixed capital thresholds.
Now, the CBN wants capital requirements to reflect the actual risks banks carry on their books.
This means lenders with riskier loan portfolios could be required to hold significantly more capital than previously mandated.
According to industry experts, missing the April deadline could leave banks operating without regulator-approved capital benchmarks, exposing them to sanctions and heightened scrutiny.
Why the stress tests matter
Stress testing is not just a routine exercise. It is designed to simulate extreme economic scenarios, including recessions, market crashes, and widespread loan defaults.
The goal is simple: determine whether banks can survive a financial shock without collapsing.
By enforcing the deadline, the CBN aims to ensure that:
- Banks maintain strong and resilient balance sheets
- Newly raised capital is not immediately wiped out by bad loans
- The financial system remains stable even under severe pressure
This comes amid concerns that some banks may still carry legacy non-performing loans that could erode fresh capital injections.
Tougher assumptions, higher stakes
Details from financial advisory firm DataPro reveal that the new stress tests will be far more stringent than previous exercises.
Among the key assumptions:
- Staged migration: Banks must assume a sharp deterioration in asset quality across all credit exposures
- Sector sensitivity: A mandatory 10 per cent provisioning floor for high-risk sectors
- Insider loans: All director and insider-related exposures will be treated as fully defaulted
These conditions are expected to significantly impact banks’ Capital Adequacy Ratio (CAR), a key measure of financial health.
Compliance is not optional
The CBN has made it clear that compliance is mandatory. Each bank must submit a Board-approved stress testing report by the April 30 deadline.
Failure to comply could trigger:
- Regulatory sanctions
- Restrictions on operations
- Reputational damage in the financial market
For institutions still adjusting after recapitalisation, this creates a tight timeline and intense pressure to deliver accurate and comprehensive reports.
Expert warning: Preparation is critical
Speaking during a recent webinar, Idris Adeleke, an Enterprise Risk Management expert at DataPro, urged banks to act immediately.
He advised institutions to begin detailed portfolio analysis as soon as the March-end financial data becomes available, noting that time is already limited.
Banks are also expected to prioritise:
- Data gathering and migration of credit exposures
- Collaboration between risk, finance, and compliance teams
- Rapid validation of financial models and assumptions
According to Adeleke, the stress test will ultimately determine each bank’s actual capital requirement until the next regulatory review cycle.
Bigger picture: Nigeria’s $1 trillion ambition
Beyond compliance, the directive ties into Nigeria’s broader economic ambition of building a $1 trillion economy by 2030, according to a report by Punch.
For this vision to materialise, the CBN believes banks must be strong enough to finance large-scale infrastructure and development projects without risking systemic instability.
“A large capital base alone can be fragile if underlying assets are deteriorating,” Adeleke warned, emphasising that true strength lies in resilience, not just size.
A defining moment for Nigerian banks
The latest directive underscores a deeper shift in regulatory philosophy. Recapitalisation may have strengthened bank balance sheets on paper, but the real test lies in how those balance sheets perform under stress.
With just weeks to comply, Nigeria’s biggest banks now face a defining moment, one that could reshape their operations, risk strategies, and long-term stability.
Source: Twitter
April 30 is no longer just another deadline. It is a litmus test for the future of Nigeria’s banking sector.
CBN Recapitalisation: Which banks are safe?
Legit.ng earlier reported that, with just days to the March 31, 2026, deadline, Nigerian banks are making final moves to comply with the Central Bank of Nigeria’s (CBN) recapitalisation directive.
The apex bank is expected to issue a major update this week, as most lenders close in on the new capital thresholds.
The recapitalisation policy, introduced in March 2024, requires banks to significantly boost their capital base, with international commercial banks expected to meet a minimum of ₦500 billion, alongside lower thresholds for other categories.
Source: Legit.ng
