E-Financial
Systemically Weak Banks Put Nigeria’s $1Trillion Ambition at Risk
By Blaise Udunze
Nigeria’s banking sector has just undergone one of its most ambitious recapitalisation exercises in two decades, all thanks to the Central Bank of Nigeria under the leadership of Olayemi Cardoso.
About N4.65 trillion ($3.38) has been raised. Balance sheets have been strengthened, at least the improvement could be said to exist in reports or accounting figures.
Regulators have drawn a new line in the sand, proposing N500 billion for international banks, N200 billion for national banks, and N50 billion for regional players. This is a bold reset.
Meanwhile, as the dust settles, an uncomfortable question refuses to go away, which has been in the minds of many asking, “Has Nigeria once again solved yesterday’s problem, while tomorrow’s risks gather quietly ahead?”
At a period when banks globally are being tested against tougher buffers, cross-border shocks, and higher regulatory expectations, Nigeria’s revised benchmarks risk falling short of what the global system demands.
In a world where scale, resilience, and competitiveness define banking credibility, capital is not measured in isolation; it is judged relative to peers, risks, and ambition.
Because when placed side by side with a far more unsettling reality, that a single South African bank, Standard Bank Group, rivals or even exceeds the valuation and asset strength of Nigeria’s entire banking sector, the celebration begins to feel premature.
The recapitalisation may be necessary. But is it sufficient? The numbers are not just striking, they are deeply revealing. Standard Bank Group, with a market valuation hovering around $21-22 billion and assets approaching $190 billion, stands as a continental giant. In contrast, the combined market capitalisation of Nigeria’s listed banks, even after recent capital raises, struggles to match that scale.
The combined value of the 13 listed Nigerian banks reached N16.14 trillion (11.9 billion) using N1.367/$1 in early April 2026, following the recapitalization momentum.
Even more revealing is the contrast at the top. Zenith Bank is valued at N4.7 trillion ($3.44 billion), Guaranty Trust Holding Company, widely admired for efficiency and profitability, is valued at under N4.6 trillion ($3.37 billion), while Access Holdings, despite managing tens of billions in assets, carries a market value below the upper Tier’s N1.4 trillion ($1.02 billion).
This is not merely a gap. It is a structural disconnect. And it raises a critical point, revealing that recapitalisation is not just about meeting regulatory thresholds; it is about closing credibility gaps.
With accounting figures or reports, Nigeria’s new capital thresholds appear formidable. But paper strength is not the same as real strength.
The naira’s persistent depreciation has quietly undermined the meaning of these figures. What looks like N500 billion in nominal terms translates into a much smaller and shrinking figure in dollar terms.
This is the misapprehension at the heart of Nigeria’s banking reform, as we are measuring financial strength in a currency that has been losing strength.
In real terms, some Nigerian banks today may not be significantly stronger than they were years ago, despite meeting much higher nominal thresholds. So while regulators see progress, global investors see vulnerability. Markets are rarely sentimental. They price risk with ruthless clarity.
The valuation gap between Nigerian banks and their South African counterparts is not an accident; it must be made known that it is strategic intentionality. By this, it truly reflects a deeper judgment about currency stability, regulatory predictability, governance standards, and long-term growth prospects. Investors are not just asking how much capital Nigerian banks have. They are asking how durable that capital is.
Even when Nigerian banks post strong profits, much of it has been driven by foreign exchange revaluation gains rather than core lending or operational efficiency. The CBN’s decision to restrict dividend payments from such gains is telling; it acknowledges that not all profits are created equal. True strength lies not in accounting gains, but in economic impact.
Nigeria has travelled this road before. Under Charles Soludo, the 2004-2006 banking consolidation raised minimum capital from N2 billion to N25 billion, reducing the number of banks dramatically and producing industry champions like Zenith Bank and United Bank for Africa. For a time, Nigerian banks expanded across Africa and became formidable competitors.
But the momentum did not last, emanating with lots of economic headwinds. One amongst all that played out was that the global financial crisis exposed weaknesses in governance and risk management, leading to another wave of reforms under Sanusi Lamido Sanusi. The lesson from that era remains clear, which revealed that capital reforms can stabilise a system, but they do not automatically transform it. Without bigger structural changes, the gains fade.
The real weakness of Nigeria’s current approach is not the size of the thresholds; it is their rigidity. Fixed capital requirements do not adjust for inflation, reflect currency depreciation, scale with systemic risk, or capture the complexity of modern banking.
In contrast, global regulatory frameworks are increasingly dynamic and risk-based. This is where Nigeria risks falling behind again. Because while the numbers have changed, the philosophy has not.
Nigeria’s economic aspirations are bold. The country speaks confidently about building a $1 trillion economy, expanding infrastructure, and driving industrialization, but in dollar terms, many Nigerian banks remain small, too small for the scale of ambition the country now proclaims. Albeit, it must be understood that ambition alone does not finance growth. Banks do.
And here lies the uncomfortable mismatch, which is contradictory in nature because the economy Nigeria wants to build is significantly larger than the banks it currently has.
In South Africa, what Nigerian stakeholders are yet to understand is that large, well-capitalised banks play a central role in financing infrastructure, corporate expansion, and consumer credit. Their scale allows them to absorb risk and deploy capital at levels Nigerian banks struggle to match. Without comparable financial depth, Nigeria’s development ambitions risk being constrained by its own banking system.
At its core, banking is about channeling capital into productive sectors, as this stands as one of its responsibilities if it truly wants to ever catch up to a $1 trillion economy. Yet Nigerian banks have increasingly, in their usual ways, leaned toward safer, short-term returns, particularly government securities. This is not irrational. It is a response to high credit risk, regulatory uncertainty, and macroeconomic instability.
But it comes at a cost. Yes! The fact is that when banks prioritise safety over lending, the real economy suffers. What this tells us is that manufacturing, agriculture, and small businesses remain underfunded, limiting growth and job creation.
Recapitalisation is meant to change this dynamic. Stronger capital buffers should enable banks to take on more risk and finance larger projects. But capital alone will not solve the problem. Confidence will.
One of the most persistent obstacles facing Nigerian banks is currency volatility. Each major devaluation of the naira erodes investor returns and reduces the dollar value of bank capital. This creates a contradiction whereby banks appear profitable in naira terms, but unattractive in global markets.
In contrast, South Africa benefits from a more stable currency environment and deeper capital markets. Without much ado, it is clear that this stability attracts long-term institutional investors that Nigeria struggles to retain. Until this macroeconomic challenge is addressed, recapitalisation alone cannot close the gap because without making it a priority, even the strongest banks will remain constrained.
In a global competitive financial market, one would agree that capital is necessary, but not sufficient. Beyond the capital, one crucial lesson stakeholders in Nigeria’s banking space must understand is that investors’ confidence is heavily influenced by governance standards and operational efficiency, which mainly guarantee more success and capability. Also, another relevant trait to sustainable banking is transparency, regulatory consistency, and accountability, which matter as much as balance sheet strength.
While Nigerian banks have made progress, lingering concerns remain around insider lending, regulatory unpredictability, and complex ownership structures. If policymakers revisit and reflect on the episodes involving institutions like First Bank of Nigeria and the liquidation of Heritage Bank, this will reinforce the perceptions of systemic risk.
Recapitalisation offers an opportunity to reset governance standards, but only if it is accompanied by stricter enforcement and greater transparency, with the key stakeholders seeing beyond the capital growth.
As if traditional challenges were not enough, Nigerian banks are also facing increasing competition from fintech companies. Nigeria has emerged as a leading fintech hub in Africa, reshaping payments, lending, and digital banking.
To remain relevant, banks must invest heavily in technology, an area that requires not just capital, but smart capital, ensuring that digital innovation becomes a core strength rather than an external add-on. The recapitalisation exercise provides the financial capacity. Whether banks use it effectively is another matter entirely.
So, are Nigeria’s new capital thresholds already outdated? Not yet. But they are already under pressure, pressure from inflation, currency weakness, global competition, and Nigeria’s own economic ambitions.
The truth is that the reforms are a step in the right direction, but they may already be systemically weak in the face of global realities. Whilst the actors keep focusing heavily on capital thresholds without addressing deeper structural issues, the reforms risk creating a system that is compliant, but not competitive, stable but not strong.
The recapitalisation exercise has bought Nigeria time. That is its greatest achievement. But time is only valuable if it is used wisely.
If policymakers treat this reform as a destination, the thresholds will age faster than expected. If they treat it as a foundation, Nigeria has a chance to build a banking system capable of supporting its ambitions.
It can either strengthen its financial foundations to match its economic ambitions or continue to pursue growth on a fragile base.
The warning signs are already visible. Systemic weaknesses, if left unaddressed, will not remain contained; they will surface at the worst possible moment, undermining confidence and limiting progress.
Otherwise, the uncomfortable truth will persist; one well-capitalised bank elsewhere will continue to stand taller than an entire banking system at home. Whilst a $1 trillion economy cannot be built on a weak banking system. The sooner this reality is acknowledged, the better Nigeria’s chances of turning ambition into achievement.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
With the rapid rate of technological change and shifting customer demands, financial institutions in Nigeria have been looking to keep up with innovation and modernise their technology.
Nigeira CommunicatiosWeek in this report evaluates top five money deposit banks that have successfully integrated technology to enhance customer experience.
This is based on 2025 and early 2026 industry reports, ranks in no particular order.
Despite variations in size and market, these bank share a foundational set of core characteristics and technologies designed to ensure stability, security, and real-time functionality.
First Bank
First Bank of Nigeria leverages technology to drive digital transformation through its FirstMobile app, *894# USSD banking, and automated Digital Xperience Centres (DXC) featuring humanoid robots, AI, and self-service kiosks.
With over 80 percent of transactions handled digitally, the bank focuses on AI-driven customer support, secure card issuance in under three minutes, and cloud-based ERP.
The bank has heavily invested in Information and Communication Technology (ICT) to transition from a traditional institution into a leading digital bank, adopting the mantra “a tech company offering banking services”.
According to a FirstBank leadership report, Callistus Obetta, group executive, technology, Digital Innovation & Services, is overseeing the bank’s IT operations.
He joined First Bank in 2016 from Standard Chartered Bank.
In his role at First Bank, he has overall responsibility for strategy formulation and leading the team charged with transforming and operating the technology platforms and banking services that power the bank and its subsidiaries.
Zenith Bank
Another heavy investor in technology is Zenith Bank and driving its digital banking, focusing on AI, cybersecurity, and fintech innovation through its annual Tech Fair and Zecathon, with a recent major IT infrastructure upgrade improving service delivery.
Key digital solutions include the *966# E-banking service, a mobile app, and the XPath digital platform.
The bank has recently completed a significant IT infrastructure migration to a new, more robust operating system to enhance service quality.
Zenith Bank offers XPath for digitizing payment collection across branches.
The bank is currently overhauling its core banking systems, implementing software from providers like Misys to modernize frontend and backend operations across its African and UK branches.
Akin Ogunranti leads the Bank’s technology group, digital transformation, and strategic technology initiatives.
Ogunranti is a seasoned banker with over 30 years of experience, joining Zenith Bank in 2004.
He previously managed the Bank’s relationships with Multilateral Institutions and Export Credit Agencies, and served as Group Head for Power & Infrastructure, Oil & Gas, and Structured Trade & Project Finance.
He currently oversees Corporate Banking, Oil & Gas, and the Bank’s Business portfolios across Lagos (Public Sector, Apapa, Isolo and Ilupeju), South-West, and South-South regions.m
Fidelity Bank
Fidelity Bank leverages digital technology to enhance banking convenience, offering solutions like Cardless ATM withdrawals, the *770# instant banking code, and the Ivy AI chatbot.
Their technology stack includes secured online banking, NQR scan-to-pay, and advanced digital tools for SME management and corporate credit lending.
Fidelity Online Banking and a Mobile App are top notches as they support NQR scan-to-pay.
The *770# Instant Banking service works on all phones without data.
The bank also offers Virtus for real-time transaction monitoring and Corporate Online Banking (CONB) for bulk payments.
Fidelity utilizes SSL encryption, token technology, and adheres to ISO 27001 and PCIDSS security standards.
With mobile technology and AI-driven solutions, Fidelity Bank provides cost-effective financial access to both banked and unbanked customers.
Stanley Chiedoziem Amuchie, Executive Director, Chief Operations and Information Officer is leading the Bank’s IT operations.
Amuchie holds a record of impressive multi- functional work experience spanning banking, audit, risk management, corporate governance, quality control, operations and information technology, strategy, financial control, business and financial advisory, accounting, general management, business development and consulting, with over 23 years of experience in the banking and financial services industry.
He joined Zenith Bank Plc and enjoyed a distinguished career spanning over 18 years which culminated in his appointment as Group Chief Financial Officer in July 2015 and Group Zonal Head in June 2018, a position he held until his exit in October 2018.
While at Zenith Bank, Stanley also served as a Non-Executive Director on the Boards of Zenith Trustees Limited, Zenith Bureau De Change Limited, Zenith Nominees Limited and was Chairman of the Board of Directors of Zenith Securities Limited.
Between April 2019 and February 2021, Stanley was Chief Technical Consultant at Mint Financial Technologies Limited (now Mintyn Bank, a digital bank).
United Bank for Africa
United Bank for Africa (UBA) also leverages technology to drive digital banking across 20 African countries and globally, serving over 45 million customers.
Key technology banking services include the UBA Mobile App, Leo AI Chatbot, and *919# USSD banking, enabling account opening, transfers, bill payments, and loans.
UBA focuses on Fintech partnerships to enhance AI-powered customer engagement and digital payments.
UBA prioritizes collaborations with fintech companies to accelerate financial inclusion and enhance digital payment infrastructure.
Emmanuel Lamptey is the key executive overseeing technology and digital transformation at UBA.
Lamptey, who serves as the Executive Director, Digital Banking, has 25 years of experience in retail banking, corporate banking, asset management, brokerage, insurance, and microfinance.
His background allows him to combine financial expertise with a digital vision.
TAJBank
TAJBank is a leading Nigerian non-interest (Islamic) bank leveraging technology for digital banking, featuring the TAJWAY app for secure, 24/7 transactions.
The bank uses the SBS Core Amplitude Up banking platform for seamless digital services, including account opening, instant transfers, bills payment, and agency banking.
It offers secure, user-friendly app offering card management, budget planning, and high-frequency transfers available on the App Store and Google Play.
Customers can open accounts through the app or website without visiting a branch.
Its offers USSD Banking and *898# code for mobile transactions can be donewithout internet connectivity.
TAJBank’s technological focus supports its goal of being a leading digital non-interest bank in Nigeria by providing seamless, ethical banking solutions.
Sherif Idi, Co-Founder/Executive Director, is actively involved in the bank’s operational trajectory and growth, often commenting on the bank’s investment in technology, human capital, and expansion strategies.
He oversee the bank’s growth-driven, tech-enabled, and innovative initiatives.
With 21 years career experience in the banking sector, Idi has worked in every unit of banking, from operations manager to marketing and customer service, risk management, branch manager and group head, carving a niche for himself.
Mr. Ola Olukoyede, chairman, Economic and Financial Crimes Commission (EFCC), has called on financial technology companies in Nigeria to strengthen their systems and safeguard their platforms against exploitation by fraudsters and other criminal actors.
Olukoyede made the call yesterday in Abuja during an industry engagement meeting with chief executive officers of fintech companies held at the EFCC headquarters.
He commended the fintech sector for driving financial inclusion and innovation in the country, noting that their platforms have expanded access to financial services.
However, he warned that the same digital space has increasingly been exploited by fraudsters.
According to him, continuous engagement between the EFCC and fintech operators is necessary to identify vulnerabilities and block loopholes being used for financial crimes.
“The opportunities you have created have also given criminals the opportunity to perpetrate crimes,” he said, adding that regular collaboration would help strengthen regulatory safeguards and protect legitimate business operations.
Olukoyede urged fintech operators to protect the integrity of their businesses, stressing that reputation remains a critical asset in the financial sector.
He warned that a single compromised transaction could damage years of trust-building.
He also advocated stronger intelligence sharing and cooperation between both parties, noting that such collaboration would enhance the EFCC’s mandate in tackling financial crimes.
On security concerns, the EFCC chairman raised alarm over the use of fintech and POS channels for ransom payments linked to terrorism financing.
He called for stricter compliance with Know Your Customer (KYC) requirements and improved monitoring of suspicious transactions.
“We have seen that criminals exploit your space, especially in areas involving ransom payments,” he said, urging the industry to work with regulators to close existing loopholes.
The meeting also featured discussions on regulatory and operational challenges in the fintech sector, with both sides exploring measures aimed at strengthening compliance and reducing fraud risks.
Central Bank of Nigeria (CBN) will from today start enforcing the new Bank Verification Number (BVN) regulations, in a major move aimed at tightening banking security and reducing rising cases of fraud across the financial system.
Key changes include restricting phone number changes to once in a lifetime, limiting banking apps to one device, and capping transactions on new devices to \(\text{₦}20,000\) for the first 24 hours.
Bank customers need to know these:
One of the major highlights of the policy is the restriction on updating BVN-linked phone numbers.
Customers will now be allowed to change the phone number attached to their BVN only once in their lifetime.
Fraudsters often take over accounts by changing phone numbers through SIM swap tricks. Limiting changes helps reduce that risk.
Make sure the BVN number you use is one you plan to keep for a long time. If you ever need to change it, do so carefully because you won’t get another chance.
Your account can be temporarily restricted for checks
Banks are now authorised to place suspicious BVNs on a 24-hour watchlist.
During this period, affected accounts may be temporarily restricted while investigations and identity verification are carried out.
If your bank notices unusual activity, your account may be flagged.
Transactions could be delayed or restricted while the bank confirms that you are the one making them.
BVN registration is now strictly for adults
Another key update is the introduction of an age restriction.
Only individuals aged 18 and above can independently register for a BVN.
Minors will no longer be able to obtain standalone BVNs, except through structured, guardian-linked arrangements approved by financial institutions.
You can only use your banking app on one device
The apex bank has also introduced a one-device-per-app rule.
This means customers can only use their banking app on one device at a time.
Logging in on a new phone will automatically log out the previous device.
If you switch to a new device, your transactions will be limited to ₦20,000 for the first 24 hours.
The policy is designed to reduce unauthorised access and improve identity verification, making it harder for fraudsters to operate using cloned devices or stolen login details.
BVN services are now limited to authorised channels
Access to BVN-related services is now more controlled.
Only CBN-approved banks and financial institutions can handle BVN updates or issues.
Avoid using third-party apps or unofficial agents. Always go through your bank for any BVN-related request.
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