Eight of Nigeria’s largest banking groups may need to raise about ₦1.74 trillion in fresh equity if the Central Bank of Nigeria adopts its proposed capital rules for financial holding companies.
Renaissance Capital Africa reached the estimate after reviewing two exposure drafts that the CBN released in June 2026. The proposals seek to strengthen banking groups, contain risks within subsidiaries, and prevent problems in one business from spreading across an entire group.
The rules could, however, open another capital-raising cycle only months after banks completed the industry’s latest recapitalisation exercise.
For investors, the key concern is whether the additional capital will strengthen banking groups or sit idle at the holding-company level and weaken shareholder returns.
What the CBN Is Proposing
The CBN wants every financial holding company to maintain paid-in capital that exceeds the combined minimum capital requirements of its subsidiaries by at least 20 percent.
Only paid-up share capital and share premium would count towards the buffer. Banks cannot use retained earnings or revaluation reserves to meet the requirement.
The regulator argues that the buffer will strengthen financial stability, reduce regulatory arbitrage, and prevent losses in one subsidiary from affecting the banking group.
Renaissance Capital sees the requirement differently. It argues that placing capital at a non-operating holding company could reduce group return on equity because the parent company generates little direct income.
Access Holdings Faces the Largest Capital Gap
Renaissance Capital estimates that Access Holdings may need to raise ₦656.04 billion, the largest amount among the banking groups it assessed.
The requirement represents about 49.6 percent of Access Holdings’ market capitalization. The group’s expansion across several African markets contributed to the size of its projected capital need.
FCMB Group may require ₦112.84 billion, while First HoldCo could need ₦135.03 billion.
GTCO and Stanbic IBTC appear better positioned. Renaissance Capital estimates their requirements at ₦56.02 billion and ₦11.84 billion respectively.
The additional capital represents about 1.2 percent of GTCO’s market value and 0.5 percent of Stanbic IBTC’s valuation. First HoldCo’s estimated requirement equals about 4.4 percent of its market capitalisation.
Zenith, UBA and Fidelity Could Enter Holdco Structures
The CBN’s proposed ring-fencing rules could also affect banks that do not currently operate under holding-company structures.
The draft requires closely connected financial businesses to sit under a single non-operating holding company. That provision could bring Zenith Bank, UBA and Fidelity Bank into the framework.
Renaissance Capital estimates that Zenith Bank could require ₦166.88 billion in additional equity. UBA may need ₦416.01 billion, while Fidelity Bank could face a ₦188.83 billion capital requirement.
UBA carries the largest projected capital need among the three standalone banks. Its estimated requirement equals 23.1 percent of its market capitalisation. Fidelity Bank’s represents 15.3 percent, while Zenith Bank’s equals about 3.8 percent.
The proposed restructuring could involve share swaps that move existing shareholders into newly created holding companies.
Another Capital Raise Could Dilute Investors
The timing presents a major challenge.
Nigerian banks recently raised capital to comply with the CBN’s previous recapitalization program. Asking shareholders for more money so soon could test market appetite and increase the risk of dilution.
Banking-sector return on average equity declined to 20.63 percent in 2025 from 31.03 percent in 2023 and 2024, according to Renaissance Capital.
Lower returns make new equity more difficult to price. Investors may resist buying additional shares if they expect the capital to produce weaker returns.
The market must also absorb another round of bank offers after supporting rights issues, public offers, and private placements during the previous recapitalisation exercise.
The Capital Recall Question
An international banking licence requires ₦500 billion in minimum capital, while a national licence requires ₦200 billion.
A downgrade could therefore release excess capital from a Nigerian banking subsidiary. But the CBN’s drafts do not clearly state whether the holding company can withdraw that money and redeploy it across the group.
Renaissance Capital considers this the most important unresolved issue.
If banks can recall the excess capital as cash, they could use it to meet group-level requirements or fund growth in other businesses.
If the money remains trapped inside the banking subsidiary, shareholders would gain little benefit while the holding company raises fresh capital separately.
Renaissance Capital estimates that GTCO could potentially recall about ₦150 billion from GTBank if the bank moves from an international to a national licence.
New Rules Could Raise Operating Costs
The proposals extend beyond the 20 percent buffer.
The CBN wants holding companies and subsidiaries to conduct shared services on an arm’s-length basis. It also plans to move functions such as compliance, risk management and internal audit into individual subsidiaries.
That change could increase costs, particularly for large groups that currently centralise several operations.
The regulator also proposes stricter capital treatment for intra-group financing.
Fully secured intra-group exposures would attract a 100 percent risk weight. Unsecured lending and financing from subsidiaries to holding companies could trigger direct capital deductions.
Access Holdings may face the greatest exposure because its banking businesses reportedly have about ₦1.03 trillion in intercompany lending. Fidelity Bank has an estimated ₦133.73 billion exposure.
Why Capital Estimates Differ
The ₦1.74 trillion estimate is not final.
Other analysts have produced significantly lower projections. Zrosk Investment Management estimated a combined shortfall of about ₦326 billion, while another market estimate placed the figure near ₦531.6 billion.
The differences reflect varying assumptions.
Analysts disagree on which banks will fall under the rules, whether standalone banks must create holding companies, and whether banks can recall capital after downgrading their licenses.
They also differ on how the CBN will calculate the buffer and treat investments in subsidiaries.
The regulator must clarify these issues before the market can determine the actual size of the capital requirement.
What Analysts Want the CBN to Change
Renaissance Capital wants the CBN to remove the additional 20 percent buffer.
It argues that a holding company whose capital already matches the combined paid-up capital of its subsidiaries should have enough capacity to support the group during periods of stress.
The investment firm also wants the regulator to confirm that banks can recall capital released after a license downgrade.
It has asked the CBN to reconsider the solo capital adequacy test for non-operating holding companies and soften the proposed treatment of intra-group financing and shared services.
What This Means for Investors
Stronger capital rules could make Nigeria’s banking groups safer and reduce the risk of contagion across subsidiaries.
However, the final structure will determine whether the policy protects depositors without placing unnecessary pressure on shareholders.
A fresh ₦1.74 trillion equity call could dilute existing investors, slow dividend growth, and reduce return on equity. It could also force banks to reconsider international licenses, offshore expansion, and group structures.
The CBN now faces a balancing test.
It must strengthen financial stability without trapping productive capital inside non-operating holding companies or forcing banks into another expensive recapitalization cycle before the benefits of the previous one become clear.
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