Nigerian Banks to Inject ₦900bn Capital as Agusto & Co. Forecasts Stable 2025 Outlook

Nigeria’s banking industry is set for another wave of capital injection as lenders raise funds to meet regulatory requirements and strengthen their balance sheets.

In its 2025 Nigerian Banking Industry Report, released this week, business intelligence and credit rating agency Agusto & Co. Limited projected that banks will inject an additional ₦900 billion before the end of the year. This comes on top of the ₦2.5 trillion already raised between 2024 and mid-2025 following the Central Bank of Nigeria’s recapitalisation directive.

Resilient Growth Amid Pressure

Despite macroeconomic headwinds, the industry has sustained its growth momentum. Total assets and contingents are expected to hit ₦242.3 trillion ($151.4 billion) by December 2025, up 44.9% year-on-year from ₦186.6 trillion in 2024.

Liquidity has also remained robust. The sector’s liquidity ratio improved from 43.5% in 2023 to 59.4% in 2024 and is projected to surpass 60% this year, supported by treasury yields and new funding strategies. Banks are increasingly turning to commercial paper issuances, with about ₦750 billion raised in the first seven months of 2025 alone.

Tougher Rules, Rising NPLs

A major challenge facing banks is the end of regulatory forbearance by the Central Bank in June 2025. This means lenders must now fully classify non-performing loans (NPLs) without special relief. As a result, the industry’s impaired loan ratio is projected to rise from 5.2% in 2024 to 6.9% in 2025.

Analysts expect more write-offs as banks take advantage of transitional waivers to clean up their books. The ongoing recapitalisation drive is also expected to resolve single obligor breaches and strengthen buffers against credit risks.

Profitability to Dip Before Rebound

While recapitalisation strengthens long-term stability, profitability will take a hit in 2025. Agusto & Co. projects a 19.2% decline in profit before tax, with return on average equity dropping from 48.2% in 2024 to 27.3% this year.

This drop is linked to higher impairment charges, reduced foreign currency revaluation gains, and the Central Bank’s strict zero net open position directive. However, the agency forecasts a rebound in 2026 as new capital is deployed and loan impairments are resolved.

Stable Outlook

Despite the near-term pressures, Agusto & Co. has maintained a “stable outlook” for the Nigerian banking industry, citing the sector’s resilience and investor confidence.

“The capital raising efforts will not only help banks meet regulatory thresholds but also provide a stronger buffer against economic shocks while supporting growth,” the report stated.

With more funds expected before December, 2025 is shaping up as a year of strategic adjustment for Nigerian banks — balancing tighter regulations, higher costs, and the push for sustainable growth.