Banks on high-octane recapitalization drive to meet CBN deadline

Banks are reportedly in the throes of back-to-back meetings to close on recapitalization plans ahead of the April 30 deadline for submissions of implementation strategies to the Central Bank of Nigeria (CBN). The implementation/work plan will detail how each bank intends to achieve its new minimum capital requirement within the two-year timeline stipulated by the apex bank. The details to cover the two-year compliance period ending March 31, 2026, comprise step-by-step activities, transactional details, instruments and other options. CBN in the past month released a circular on a review of minimum capital requirements for commercial, merchant and non-interest banks. It increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion. Others included merchant banks, N50 billion; non-interest banks with national licenses, N20 billion and non-interest banks with regional licenses will now have N10 billion minimum capital. The 24-month timeline for compliance started yesterday and ends on March 31, 2026.  Insiders yesterday said that directors of the banks and professional parties were making final adjustments to market-based values and timelines. They said about one-third of banks plan to increase their capital base mainly by raising their capital adequacy while others outline prospects for the combination of capital raise and mergers /acquisitions. According to timelines of activities, about seven banks are expected to float their share offerings in the second half of this year. The capital market is expected to be busier in 2025.