Banks in Nigeria are increasingly narrowing their recapitalisation strategies to private equity injections and business restructuring as the final phase of the ongoing banking recapitalisation exercise gathers momentum. Regulatory sources disclosed yesterday that there are currently no major pending applications from banks seeking to raise fresh capital from the public.
The sources added that discussions around mergers and acquisitions remain minimal and have not advanced to a level that would warrant preliminary assessment or review by regulators. Industry insiders explained that many banks had earlier explored a wide range of recapitalisation options, including public and private capital raisings, special placements, business restructuring and potential business combinations. However, as the process advances, attention has shifted largely to special capital injections through private equity arrangements.
According to the sources, these private equity investments are being driven mainly by high net-worth strategic investors who are already undergoing or have provisionally met the “fit and proper” assessment requirements of the Central Bank of Nigeria (CBN). This approach is seen as a more flexible and faster route to meeting recapitalisation thresholds compared to public offers or mergers. In addition, some banks are reportedly keeping restructuring of their licensing and banking franchises as a last-resort option.
This strategy would involve adjusting the scope of their operations in order to reduce capital requirements, particularly for institutions that already meet the minimum capital threshold for specific categories of banking licences. Analysts note that such restructuring could help affected banks scale the recapitalisation hurdle more easily, especially those seeking to align their operational footprint with available capital. The ongoing recapitalisation exercise, being overseen by the CBN, is aimed at strengthening the resilience of the banking sector, enhancing financial stability and ensuring that banks are adequately capitalised to support economic growth.
As the deadline approaches, the choices being made by banks underscore a cautious and targeted approach to meeting regulatory requirements.
