The Nigerian banking sector has experienced a dynamic and transformative 12 months. The high interest rate environment and the naira devaluation initially resulted in windfall profits in FY2023. Subsequently, the Central Bank of Nigeria (CBN) mandated a 900% increase in capital requirements, leading to a funding gap of circa ₦4.7 trillion ($2.9 billion). This regulatory shift has opened up new investment opportunities within the sector.
In response to these changes, tier 1 banks like First Bank Holdings PLC, Guaranty Trust Holding Company PLC (GT), and Access Holdings PLC (Access Holdings), amongst others, have turned to the equity market to raise fresh capital to meet the new regulatory requirements. However, these capital-raising efforts are not solely about compliance. These institutions aim to leverage the newly raised funds to expand their banking and non-banking operations, ultimately enhancing shareholder value.
GT has outlined plans to use the capital raised to expand its banking,
