CBN Recapitalisation: 7 Nigerian Banks Could Lose Top-Tier Licences

Nigeria’s banking sector is heading into a hard deadline that could redraw the competitive map by March 31, 2026. Under the Central Bank of Nigeria’s (CBN) recapitalisation programme, announced in March 2024 and implemented from April 1, 2024, banks have a 24-month window to meet new minimum capital requirements or adjust their operating licences.

The new thresholds are blunt: ₦500 billion for commercial banks with international licences, ₦200 billion for national licences, and ₦50 billion for regional licences.

As the clock runs down, the strategy across the industry is splitting into two tracks: banks that are raising capital to keep their current status, and banks that may step down to a lower licence category to match what they can realistically fund and what their business model actually needs.

Why this deadline is forcing tough choices

The CBN’s stated goal is long-term stability: stronger balance sheets, better shock-absorption, and banks that can credibly fund a larger, more ambitious economy. 

That ambition is also tied to the broader “bigger economy” narrative coming from policy circles, with bank resilience positioned as a prerequisite for scale.

But recapitalisation is not a motivational speech, it is expensive. For banks that earn most of their money locally, the question becomes simple: Is an international licence still worth the capital cost?

That is where the downgrade conversation enters the room.

7 banks reportedly considering licence downgrades

Recent reporting in the market suggests at least seven banks are weighing the option of scaling down their licences, not necessarily because they are “collapsing,” but because they are choosing a structure that fits shareholder appetite and operational focus.

This shift is easier to understand when you consider how banking has changed:

• Digital channels have reduced the advantage of having the widest physical footprint.
• A bank can dominate specific segments—SMEs, retail, payments, corporate banking—without operating across borders.
• Shareholders may prefer a “fit-for-purpose” bank that grows steadily over a bank chasing a licence category that forces dilution and high-cost fundraising.

One scenario being discussed publicly is a bank stepping down temporarily say, from international to national, then raising more capital later to upgrade again once conditions improve.

What a licence downgrade actually means

Licence categories define operational scope:

• International: can operate across borders and typically targets cross-border trade finance, diaspora corridors, and multinational clients.
• National: can operate nationwide within Nigeria.
• Regional: is restricted to a limited number of states.

A downgrade is not just a label change, it can reshape products, expansion plans, and the kind of customers a bank prioritises. For customers, the effect is often indirect: you may not lose your account, but the bank’s ability to execute certain cross-border strategies or expansion plans may narrow.

How far compliance has gone so far

Not everyone is behind. The CBN has indicated that about 20 deposit money banks have already met the new capital requirements, while others are still fundraising through rights issues, public offers, private placements, and balance-sheet restructuring.

This split is important. It suggests the endgame is not uniform. Some banks will finish the exercise stronger and larger. Others may survive by getting smaller on paper—through a lower licence category, partnerships, or consolidation.

The big number: ₦4.14 trillion expected across the system

Deloitte estimates the sector may raise roughly ₦4.14 trillion in fresh capital before the deadline, with the recapitalisation push framed as a response to inflation, tight financial conditions, currency volatility, and broader macro risks that require thicker capital buffers.

That estimate matters because it signals scale: recapitalisation is not a “few banks” event, it is a system-wide reset.

CBN is tightening oversight on the money being raised

The CBN is also trying to avoid a familiar Nigerian cycle: banks raise money, take excessive risks, and the system pays later.

Recent commentary around the programme places heavy emphasis on governance, transparency, and accountability, including tighter scrutiny of capital-raising processes and how funds are deployed.

In practical terms, this means recapitalisation is being treated not just as a fundraising exercise, but as a risk-management reset, especially around credit decisions, related-party exposures, and the discipline of growth.

Basel III is part of the same reset

Recapitalisation is also being reinforced by Nigeria’s ongoing transition to Basel III, which focuses on capital quality, liquidity monitoring, and resilience against risks such as operational weaknesses and cyber threats.

For banks, that combination, higher capital plus stricter prudential expectations, raises the bar. For the system, it is the point: fewer fragile balance sheets, fewer unpleasant surprises.

Consolidation is back on the table

If some banks cannot raise capital quickly enough, or refuse to dilute shareholders, mergers and acquisitions become a logical route.

A credit rating agency, DataPro, has projected that at least three significant bank mergers could happen by early 2026 as the deadline pressure intensifies.

That is consistent with how recapitalisation plays out globally: higher minimum requirements often lead to consolidation, because scale becomes a competitive advantage.

What to watch between now and March 31, 2026

Three signals will tell you how this ends:

1. Capital-raise outcomes: Which offers close successfully, and which banks struggle to attract investors at acceptable terms.
2. Licence decisions: Banks that publicly confirm stepping down will likely present it as “strategy,” not distress, watch the details.
3. Merger announcements: Consolidation tends to accelerate near deadlines because negotiations become more urgent.