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Recapitalisation Reality Check: Uncovering the Truth Behind Nigeria’s Banking Boom

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By Blaise Udunze

When the Central Bank of Nigeria (CBN) announced a new round of bank recapitalisation in March 2024, many expected the leading banks, especially those boasting record-breaking profits in the hundreds of billions and trillions, to sail through with ease. Their financial statements glistened with prosperity, with expanding balance sheets, rising dividends, and bullish share prices.

Indeed, five of Nigeria’s top 10 banks reported a combined pre-tax profit of N4.6 trillion in 2024, showing a staggering 70 percent increase from the previous year, with Zenith Bank and Guaranty Trust Holding Company crossing the trillion-naira mark for the first time. The results painted a picture of robust profitability and resilience.

Yet, barely months after the profit announcements, the same banks found themselves racing back-to-back to the capital market to raise fresh funds. By the first half of 2025, Nigeria’s banking industry was at a crossroads. Behind the glitter of trillion-naira profits lay a more sobering reality of an industry scrambling to meet the CBN’s recapitalisation directive.

The contradiction is stark: record profits on one hand, desperate fundraising on the other. If the banks were truly as profitable and resilient as they claimed, they wouldn’t be begging investors for fresh equity to meet new thresholds.

Behind the strong showing of the market leaders lies an even deeper concern. The smaller commercial and regional banks are struggling to formulate credible recapitalisation strategies. As the March 31, 2026 deadline looms, the CBN has confirmed that only 14 banks have so far scaled the recapitalisation hurdle. That leaves nearly 19 institutions still in search of capital in a market already skeptical of their true worth.

The recapitalisation push has therefore become the clearest indicator of the sector’s underlying fragility. The CBN’s new capital requirements of N500 billion for international banks, N200 billion for national banks, and N50 billion for regional banks have forced lenders to confront a fundamental question. How much of their reported profits actually represents real financial strength?

Much of Nigeria’s profit boom has been a deception, a mirage built on foreign exchange revaluation gains and arbitrary fees rather than genuine operational efficiency. The unification of exchange rates and subsequent naira depreciation in 2023 and 2024 delivered massive revaluation windfalls on dollar-denominated assets, inflating balance sheets overnight. But these were paper gains, not cash profits, and could not be deployed to strengthen capital or fund new loans.

Beyond FX gains, Nigerian banks have increasingly relied on fees and charges as easy revenue. Despite repeated CBN sanctions for breaching its Guide to Charges, banks continue to extract billions from customers through transfers, withdrawals, ATM fees, SMS alerts, and account maintenance. With over 312 million active bank accounts, these charges now contribute more to profitability than traditional lending or genuine financial intermediation.

It is little surprise, then, that the recapitalisation exercise has exposed the widening gap between declared profitability and true solvency. While five Tier-1 banks together raked in N4.6 trillion in pre-tax profit in 2024, nearly 70 percent higher than in 2023, many mid-tier banks can barely keep pace. The recapitalisation gap across the sector is now estimated at N4.7 trillion.

As of September 2025, only 14 banks had crossed the line, while others scramble for mergers, rights issues, or license downgrades to survive. The CBN’s insistence that only paid-up capital and share premium will count while excluding retained earnings has stripped away the accounting camouflage that once masked weakness.

For the market leaders, the race has been aggressive but achievable. Access Holdings raised N351 billion through a fully subscribed rights issue. Zenith Bank’s N350.4 billion hybrid offer was oversubscribed by 160 percent. Wema Bank, once a mid-tier lender, successfully raised N200 billion and became a national success story. Among specialised institutions, Greenwich Merchant Bank sealed its own recapitalisation, supported by capital injections and debt-to-equity conversions that secured its merchant banking license, while Jaiz Bank rose above the N20 billion target to remain the flagship of Islamic banking. Lotus has met the N10 billion bar, consolidating its place in Nigeria’s fast-growing alternative sector.

Another notable entrant is Globus Bank, which in 2024 raised N52.9 billion to lift its capital to N98.6 billion and followed in 2025 with a further N102 billion via rights issues and private placements. The raise subscribed entirely by existing shareholders took its capital above N200 billion. The bank now awaits final verification from the CBN before being formally recognized as compliant.

For others, however, it has been a painful crawl. Fidelity Bank’s N205.45 billion hybrid offer still leaves a N160 billion gap to the N500 billion benchmark. Guaranty Trust Bank reached its own target through a two-phased approach that started with a rights issue in Nigeria that netted N365.8 billion. Subsequently, GT listed shares on the London Stock Exchange with proceeds of $105 million to reach the required target, while UBA Plc launched a N157 billion rights issue in July 2025, following a N239 billion offer in November 2024 that was oversubscribed at N251 billion, with N240 billion accepted. The new offer, extended to September 19, 2025, helped the bank meet the CBN’s N500 billion capital requirement.

As of September 2025, First Bank has secured N187.6 billion and plans an additional N350 billion in private placements, but it still needs to secure the remaining funds to meet the CBN’s requirements.  FCMB Group Plc launched a N160 billion public share offer to meet the CBN’s N500 billion capital requirements for international banks, with the offer closing on November 6, 2025. The offer follows a successful N147.5 billion share sale in 2024.

Fidelity raised N176 billion in fresh capital in 2024 and is moving to get an additional N195 billion via private placement before the end of the year. Sterling Bank has not yet completed its recapitalisation as it commenced an N87.067 public offer. This offer follows completion of a N75 billion private placement and a N28.79 billion rights issue, which was significantly oversubscribed by its shareholders.

Consolidation pressures are once again reshaping Nigeria’s banking landscape. Titan Trust’s acquisition of Union Bank and the completed Providus and Unity Bank’s merger reflect the reality that not every institution will raise sufficient equity alone. More combinations are expected in the months ahead, with smaller lenders likely to be folded into stronger franchises as the recapitalisation deadline approaches.

This trend mirrors the 2005 consolidation era, which trimmed 89 banks down to 25, ushering in a new era of scale and scrutiny. The 2024-2026 recapitalisation may well repeat history, producing fewer but sturdier players, banks large enough to finance Nigeria’s economic transformation.

But history offers a warning that recapitalisation is not reform. Bigger balance sheets may shield banks from global shocks, but they do not guarantee developmental relevance. Unless the philosophy of Nigerian banking itself changes from profit-first to purpose-driven intermediation, the sector will keep producing “giant banks in a fragile economy.”

The real challenge is not size, but substance. Nigeria doesn’t just need bigger banks; it needs better banks. It needs institutions that see SMEs as partners rather than liabilities, that lend to real producers rather than recycle deposits into government securities. It needs lenders that adopt fintech-driven underwriting, regulators that reward productive lending, and policymakers that create the infrastructure, power, and security needed to make risk-taking viable.

Recapitalisation, in this light, should not be seen merely as a regulatory hurdle but as a mirror reflecting both the success and the shame of Nigeria’s banking system. The trillion-naira profits may have dazzled investors, but the scramble for new capital reveals the truth that the sector’s foundations remain fragile, its governance inconsistent, and its contribution to real economic development still limited.

The CBN’s policy, painful as it may be, is a necessary reality check. It forces banks to prove that their wealth is more than paper-deep and that their balance sheets can support Nigeria’s ambitious $1 trillion economy vision. For investors and depositors, it is a wake-up call that what glitters in the financial statements may not always be gold.

In the end, recapitalisation is not just about raising funds; it is about restoring credibility. Because trust, once eroded by profit manipulation and corporate posturing, takes far more than a balance sheet to rebuild.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]


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NITDA, NBC Explore Strategic Collaboration on Digital Transformation, Media Regulation

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The Director General of the National Information Technology Development Agency (NITDA), Kashifu Inuwa CCIE, has reaffirmed the agency’s commitment to deepening inter-agency collaboration as he received the Director General of the National Broadcasting Commission (NBC), Mr Charles Ebuebu, on a courtesy visit aimed at exploring strategic partnerships in digital transformation and regulatory frameworks across Nigeria’s media and technology sectors.

Speaking during the meeting, Inuwa stated that digital transformation and regulation are inseparable in Nigeria’s rapidly evolving digital ecosystem. He also emphasised that digital transformation is not a one-off project but a continuous journey that requires constant improvement, periodic target-setting, and organisational adaptability to emerging realities.

According to the NITDA boss, the agency deliberately embarked on a transformational journey to reposition itself from a traditional civil service structure to a high-velocity, smart public sector organisation. He noted that when the agency began its transformation drive, a significant percentage of its workforce came from the mainstream civil service, bringing with it entrenched bureaucratic mindsets and rigid operational practices. This, he said, necessitated a conscious decision to change the narrative.

“More than 70 or 80% of our staff came from the mainstream public service, and we know the mindset of public servants, so we started changing that narrative by focusing on people, resetting mindsets, building capacity, and fostering a culture that supports innovation and accountability,” he noted.

Inuwa explained that NITDA’s approach to digital transformation was anchored on three core pillars: people, processes, and technology. He stressed that no matter how advanced technology may be, it cannot deliver value without the right people and efficient processes in place.

He further disclosed that the agency undertook a comprehensive cultural reorientation programme, supported by cultural audits and initiatives aimed at creating psychological safety within the organisation.

“This was critical to enabling staff at all levels to freely contribute ideas, challenge existing processes constructively, and engage in horizontal and vertical collaboration without fear of reprisal,” he stated.

He noted that culture remains the foundation upon which any successful strategy must stand, adding that “no matter how good a strategy is, without the right culture, execution will fail.”

Providing further insight into the transformation journey, he explained that NITDA adopted an integrated framework encompassing people, process, culture, content, and technology. Through this framework, the agency identified and addressed deeply rooted bureaucratic tendencies such as command-and-control structures, risk aversion, and excessive dependence on directives from senior leadership.

According to the DG, “these reforms paved the way for trust-based delegation, inter-departmental collaboration, and process optimisation”.

He further revealed that NITDA documented over 396 internal processes and subsequently streamlined them to eliminate inefficiencies and repetitive executive approvals. He cited examples where routine operational tasks that previously required multiple approvals at the Director General’s level were redesigned to empower departments as gatekeepers, allowing leadership to focus on strategic priorities.

This process optimisation, he said, also created the foundation for automation and the integration of digital tools.

On capacity building, the DG disclosed that all NITDA staff underwent mandatory artificial intelligence (AI) training, reinforcing the agency’s position that AI is a tool for enhancing productivity rather than replacing human capital.

He noted that staff across departments are now leveraging AI to improve workflows, generate ideas, and transition from manual administrative roles to AI-enabled system administration.

Inuwa added that technology deployment at NITDA is deliberately driven by business value rather than trend adoption, stressing that technology must support clearly defined processes and organisational objectives.

He announced that the agency has developed a comprehensive digital transformation playbook, capturing lessons learned from its journey, which it is willing to share with NBC and other government institutions.

To advance collaboration with NBC, Inuwa proposed concrete areas of partnership, including sharing the agency’s digital transformation playbook, delivering tailored training and capacity-building programmes, enrolling NBC staff in digital literacy initiatives developed with global technology partners such as Cisco, and providing technical support for modernising regulatory frameworks to align with the evolving digital and media ecosystem.

Earlier in this remark, Mr Ebuebu called for deeper collaboration between the NBC and NITDA, describing the partnership as long overdue in the face of rapid media and technology convergence.

He noted that although he has had several insightful interactions with the DG NITDA in the past, it was important to institutionalise cooperation between both agencies to address emerging developments in media, technology, data governance, and Nigeria’s digital future.

While calling for closer ties between the two agencies, he emphasised that a strategic partnership between NBC and NITDA is critical to effectively regulate the evolving media ecosystem, harness technology for content creation and distribution, promote the growth of local media, facilitate knowledge transfer, and protect Nigeria’s cultural and national interests.


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DG NCC Tasks University Dons on Research Commercialization, IP Management to Build Global Competitive Ecosystems

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Dr. John Asein, director-general, Nigerian Copyright Commission (NCC), has charged universities to leverage Intellectual Property (IP), innovation management and research commercialisation to build vibrant, sustainable and globally competitive ecosystems.

The DG stated this while delivering a paper on: ‘’Research Commercialisation, IP Policy and Innovation Management’’ at the Committee of Vice-Chancellors of Nigerian Universities (CVCNU) organised Business Clinic themed: Unlocking University-Driven Business Ecosystems: Innovation, Partnerships and Sustainable Enterprise Models in Abuja.

The programme was targeted at engaging Vice-Chancellors, principal officers and other key officers in Nigerian Universities in a practical dialogue on how to transit their institutions into thriving business ecosystems through innovation, enterprise development and strategic partnerships.

In his presentation, Dr. Asein, disclosed that Universities are now recognised as engines of national development and innovation hubs that must connect scholarship to business.

He noted that with over 300 Universities in Nigeria, there is need for structured pathways to turn ideas into commercial outcomes while attention should be focused on IP assets in our universities in order to harness them in a safe, sustainable and satisfactory manner.

The DG NCC speaking further on leveraging resources from the creativity locked up within the university system, harped on the need to harness the soft power of our youth as Nigeria’s most valuable natural resources are its people.

Drawing demography from Nigeria youthful population, he observed that over 70 percent of Nigerians who are under the age of 30 are mostly in the university system studying. These youths, he noted, shape cultures, technology and innovation through creativity and digital skills.

He tasked universities to become innovation factories where young people can explore ideas, protect their IP and grow startups by integrating innovation culture, entrepreneurship training and IP awareness into its learning environment.

He equally urged Universities to look beyond the sciences to commercialize traditional knowledge-based innovations and harness the potentials in the creative arts disciplines like music, visual arts, theatre arts and others for commercial outcomes.

Dr. Asein, recommended that universities as centres of learning, should take the lead in using the IP system for promoting education and learning, wealth creation, revenue generation and institutional development.

Underscoring the need for all universities to have an IP Policy, he noted that the Model developed by the Nigerian Copyright Commission in partnership with the CVCNU is a good starting point.

The Secretary-General, CVCNU, Prof. Andrew Haruna, presented the welcome address at the event while the Director, Technology Innovation and Commercialisation, NOTAP, Mrs. Adah H.N. Mokolo-Oladunke represented the Director-General, NOTAP at the event.

The 2025 CVCNU Business Clinic witnessed attendance from representatives of Public and Private Universities across the 36 States in Nigeria.

 


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US invests $115m in counter-drone tech for World Cup security

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US invests $115m in counter-drone tech for World Cup security

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The US Department of Homeland Security (DHS) will invest $115 million in counter-drone technology to safeguard the 2026 FIFA World Cup and events marking America’s 250th independence anniversary, creating a dedicated office for rapid drone system deployment.

Homeland Security Secretary Kristi Noem described drones as “the new frontier of American air superiority,” stressing the need to counter threats from drug cartels using unmanned aircraft for smuggling and surveillance, alongside incidents like a 2025 NFL stadium drone flight and 2024 New Jersey sightings.

The funding supports 11 World Cup host cities expecting over one million visitors, building on FEMA’s $250 million grants to those states and addressing risks heightened by cartels’ advancing tech, including a reported FBI tracking plot in Mexico.

DHS has conducted over 1,500 counter-drone missions since 2018, with the new Program Executive Office accelerating acquisitions amid President Trump’s border security push.


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