February 16, (THEWILL) — As Nigeria’s banking industry enters the final stretch of the Central Bank of Nigeria’s (CBN) recapitalisation programme, the scale of capital already raised underscores one of the most ambitious balance sheet overhauls in the sector’s history.
With less than two months to the March 31, 2026deadline, 23 banks spanning listed and unlisted institutions have successfully met or exceeded the new minimum capital thresholds across international, national, merchant and non-interest banking categories. Collectively, these early-compliant lenders have secured an estimated N5.142 trillion in qualifying capital, positioning them ahead of peers still racing to meet regulatory requirements.
The recapitalisation drive, announced in early 2024 and implemented through 2025, has not only reshaped bank balance sheets but has also transformed Nigeria’s equity market, with banking stocks emerging as the dominant force behind the Nigerian Exchange’s (NGX) strong start to 2026.
Capital base of compliant banks
Under the CBN’s revised framework, banks are required to hold higher minimum paid-up share capital and share premium depending on the scope of their licences. International banks must now maintain N500 billion, national banks N200 billion, merchant banks N50 billion, while non-interest lenders are required to hold between N10 billion and N20 billion.
As of January 2026, 23 banks had crossed these thresholds.
The combined capital base of these institutions including both listed and unlisted lenders stands at approximately N5.142 trillion, according to market estimates. This figure reflects fresh equity raised through rights issues, public offers, private placements, mergers, and balance sheet restructurings over the past year.
Among international banks, tier-one lenders such as Access Bank, Zenith Bank, GTBank, United Bank for Africa (UBA), Fidelity Bank and First Bank have all surpassed the N500 billion mark. In the national banking category, Stanbic IBTC, Wema Bank, Ecobank Nigeria, PremiumTrust Bank and Sterling Bank have emerged as early movers, while merchant banking requirements have been met by institutions including FSDH, Greenwich, Nova and Rand Merchant Bank. Non-interest lenders such as Jaiz Bank, Lotus Bank, TAJBank and Alternative Bank have also crossed their respective thresholds.
For listed banks, the recapitalisation exercise has had a dual impact strengthening regulatory capital while simultaneously driving a sharp rerating in market valuations.
As of early February 2026, listed banks have collectively raised or secured approximately N3.1 trillion in qualifying capital, defined strictly by the CBN as paid-up share capital plus share premium, excluding retained earnings.
This capital raise was particularly significant for the largest banks, which had faced a combined shortfall of about N1.47 trillion to meet the new N500 billion international licence requirement. On the equity market, investor response has been emphatic. The total market capitalisation of listed banking stocks on the NGX has surged to over N17 trillion as of January 23, 2026, compared with less than N4 trillion before the recapitalisation exercise began.
Several lenders now boast trillion-naira valuations. GTCO is valued at about N3.6 trillion, Zenith Bank at nearly N2.9 trillion, First HoldCo at over N2.1 trillion, while UBA, Access Holdings and Stanbic IBTC each command market capitalisations well above the N1 trillion mark. Even mid-tier lenders such as Wema Bank have seen extraordinary appreciation, with market value crossing N1 trillion following aggressive equity issuance and renewed investor interest.
Banking stocks power NGX rally in 2026
The banking sector has been the primary engine behind the NGX’s buoyant performance so far in 2026.
In January alone, the NGX Banking Index advanced by 6.99%, significantly outperforming several other sectoral indices. By the first week of February, the broader market’s year-to-date return stood at about 10.4%, driven largely by renewed demand for fundamentally strong financial stocks ahead of full-year 2025 earnings releases.
Market activity has also intensified. Early February trading saw a 98.3% week-on-week surge in turnover value, reflecting high liquidity as both domestic and foreign investors reposition for what many view as a “post-recapitalisation banking era”.
This momentum marks a sharp contrast with early 2025, when the NGX All-Share Index gained a modest 1.53% in January. However, 2025 ultimately proved to be a landmark year, with the Nigerian market closing with a 51.19% rally, one of the strongest performances globally. That rally was fuelled in large part by the announcement and early execution of the recapitalisation programme, alongside broader market reforms and foreign exchange adjustments.
From capital raising to capital utilisation
With most major banks now comfortably above regulatory thresholds, attention in the market is beginning to shift away from capital raising toward how effectively that capital will be deployed. Analysts increasingly describe 2026 as “Phase 2” of recapitalisation.
Phase 1, which dominated 2025, was defined by the race to meet the CBN’s minimum capital requirements before the March 2026 deadline. Phase 2, now unfolding, centres on capital utilisation, operational efficiency and profitability sustainability.
Two metrics are emerging as the key litmus tests: Return on Equity (ROE) normalisation and cost-to-income efficiency. ROE measures how much profit a bank generates from shareholders’ funds. The recapitalisation exercise, while strengthening balance sheets, has also significantly expanded equity bases. For many banks, equity more than doubled within a short period. The immediate consequence is dilution. Unless profits rise proportionately, ROE naturally declines.
In 2024 and 2025, Nigerian banks reported unusually high ROEs in some cases exceeding 30% largely driven by one-off foreign exchange revaluation gains following naira devaluation. Those windfalls have now faded.
For 2026, analysts expect ROEs to normalise to a more sustainable range of 18 percent to 22 percent. Investors are closely watching which banks can defend earnings, maintain dividend payouts and grow profitability despite having significantly more shares in circulation. Banks that fail this test risk seeing their share prices stagnate, even with stronger capital positions. Operational efficiency, typically measured by the cost-to-income ratio (CIR), is becoming the second major differentiator.
With N500 billion or more on their balance sheets, banks are under pressure to deploy capital into technology, automation and digital infrastructure that can reduce operating costs over time. Rising expenses from salaries to energy and logistics mean that simply holding excess capital is no longer enough.
Leading banks such as GTCO and Zenith Bank are targeting CIRs below 45%, using investments in digital banking, cloud infrastructure and process automation to offset structural cost pressures. According to market analysts, banks that successfully improve efficiency are more likely to restore ROE faster after dilution, reinforcing the link between operational discipline and shareholder returns.
What investors are watching next
As of February 2026, research firms such as CardinalStone and Chapel Hill Denham are already adjusting investment recommendations. The focus is shifting away from banks that merely met capital requirements toward those demonstrating superior operational efficiency and earnings resilience.
In that sense, recapitalisation has moved from being a regulatory hurdle to a competitive filter.
With N5.14 trillion already secured by early-compliant banks and market valuations reflecting high expectations, the next chapter of Nigeria’s banking story will be written not by who raised the most capital, but by who uses it best.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
