In March 2024, the Central Bank of Nigeria (CBN) released recapitalisation guidelines for Nigerian banks. The minimum capital requirements for banks were revised with a compliance deadline of March 31, 2026.
This new guideline came almost two decades after the last recapitalisation exercise in 2004. The 2004 exercise saw banks' minimum capital base increase drastically by 1100%, from ₦2 billion to ₦25 billion, triggering a wave of mergers and acquisitions within the banking sector and significantly reducing the number of banks operating in the country from 89 to 25. In contrast, the 2024 recapitalisation marks a 900% increase from 2004, with significant implications for the sector.
This report examines the CBN’s decision to raise capital requirements, how banks are responding, and the implications for the banking sector.
Regulatory Impact Assessment: GDP Growth
While the current recapitalisation effort shares some similarities with the 2004 exercise, notable differences highlight the CBN's specific objectives this time around.
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