Nigeria’s ongoing banking sector recapitalisation exercise is entering a decisive phase, with a mix of capital raising, mergers, investor negotiations and regulatory verification shaping the industry ahead of the March 31, deadline set by the Central Bank of Nigeria (CBN).

The exercise recorded a milestone this week as Fidelity Bank Plc emerged as a newly elevated Tier-1 bank, following the successful completion of its capital-raising programme, reinforcing the momentum across the sector as institutions scramble to meet revised minimum capital requirements.

According to Proshare Research, banks are currently undergoing capital verification by the CBN to confirm the authenticity and eligibility of funds raised during the recapitalisation process. The verification exercise is expected to determine the final compliance status of several institutions before the regulatory deadline.

Market analysts noted that while two banks have sought operational reclassification, reports suggesting that a mid-sized bank had applied to downgrade from an international banking licence to a national licence are inaccurate.

Sources within the regulatory environment explained that the bank involved is undergoing capital verification and would retain its international licence if the capital it raised is successfully validated by the CBN. The clarification was based on discussions between Proshare’s Economic and Market Intelligence Unit (EMIU) and senior regulatory officials who requested anonymity because they were not authorised to comment publicly on the matter.

Fidelity Bank’s recent capital-raising success has been widely seen as a turning point in the recapitalisation process. The bank secured regulatory approval from both the CBN and the Securities and Exchange Commission (SEC) to launch and close a private placement of ordinary shares on December 31, 2025.

The exercise raised N259 billion in fresh capital, lifting Fidelity’s eligible capital base from N305.5 billion to N564.5 billion, subject to final regulatory confirmation. The increase effectively positions the bank among Nigeria’s Tier-1 lenders and strengthens its capacity to compete with the country’s largest financial institutions.

Beyond Fidelity Bank, the recapitalisation drive is witnessing broad-based progress across the banking sector.

Rand Merchant Bank Nigeria Limited confirmed that it has met the minimum capital requirement for merchant banks operating in Nigeria, achieving full compliance as of December 30, 2025.

Intelligence gathered by market analysts suggests that the recapitalisation programme could achieve about 90 percent success by the March 31 deadline. The remaining institutions that fail to meet the minimum capital requirement are expected to undergo technical resolution measures, including mergers, acquisitions or regulatory restructuring.

Investigations also show that most Tier-1 banks have already met the N500 billion capital benchmark required for international banking licences.

United Bank for Africa (UBA), for instance, crossed the threshold following the completion of its N178 billion rights issue. Several other banks operating under national and regional licences have also reportedly achieved compliance.

These include Citibank Nigeria, Ecobank Nigeria, Alternative Bank Limited, Standard Chartered Bank Nigeria, Globus Bank, Stanbic IBTC Bank, Sterling Bank, Wema Bank, PremiumTrust Bank, Providus Bank and TAJBank Plc.

As the deadline approaches, regulatory attention is increasingly focused on banks that remain below the required capital threshold.

Industry analysts say the CBN is closely monitoring strategic investor interest in these institutions, with competition intensifying between local and foreign investors seeking core ownership stakes in weaker banks.

Market sources indicate that investor groups from the Arabian Peninsula and organisations linked to European banking institutions are among those competing for stakes in one of Nigeria’s oldest banks.

Regulators are believed to favour credible foreign strategic investors as a way of boosting confidence in the recapitalisation programme and strengthening the financial system.

Across the sector, several institutions are exploring different strategic options to meet the regulatory requirements.

Union Bank is reportedly attracting foreign investor interest, particularly from the United Arab Emirates, while a legal dispute involving a former core investor is expected to be resolved soon, potentially allowing the bank to complete its capital restructuring before the deadline.

Keystone Bank is also attracting interest from both local and foreign investor groups, although analysts say local investors may struggle to independently meet the required capital threshold without external support.

Meanwhile, Unity Bank’s proposed merger with Providus Bank is progressing, with agreements on capital structure and regulatory alignment already in place. Polaris Bank is also expected to pursue investor-led recapitalisation or a potential merger with another Tier-2 lender, with market speculation pointing to Wema Bank as a possible partner.

Proshare’s EMIU noted that the CBN appears receptive to mergers and acquisitions as a strategic pathway for institutions with weak balance sheets to build stronger, more resilient banking entities.

For banks listed on the Nigerian Exchange Limited (NGX), the outcomes of capital-raising exercises have varied. While most Tier-1 and Tier-2 lenders have met revised capital thresholds, smaller Tier-3 banks remain under pressure to secure new investors or risk forced consolidation.

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