Premium Trust Bank has emerged as an early mover in the Central Bank of Nigeria’s (CBN) ongoing recapitalisation exercise, announcing it has already crossed the ₦200 billion capital threshold ahead of the 2026 deadline. The move puts the relatively young institution in a strong position as the industry braces for what many analysts predict will be a wave of mergers and acquisitions.
The recapitalisation exercise—one of the most consequential reforms in Nigeria’s financial system since the landmark 2004–2005 consolidation led by then-CBN Governor Charles Soludo—is again reshaping the sector. At the time, the minimum capital base was raised to ₦25 billion, forcing a dramatic reduction in the number of banks from 89 to 25 through mergers and acquisitions.
Today, with Nigeria targeting a $1 trillion economy, the stakes are higher. The CBN insists that banks must be stronger and more resilient to finance critical sectors like infrastructure, manufacturing, and technology, while also extending credit to small and medium-sized enterprises.
Mid-Tier Banks Face Tough Choices
Mid-tier banks such as First City Monument Bank Plc (FCMB), Sterling Bank Plc, Polaris Bank Plc, Wema Bank Plc, Unity Bank Plc, Keystone Bank Ltd, and Union Bank of Nigeria Plc are actively seeking new funding avenues. Industry watchers say that while some of these banks may successfully meet the new thresholds, others could face pressure to explore mergers or strategic partnerships to remain relevant.
“The reality is that not all mid-tier banks can go it alone,” a Lagos-based investment banker told reporters. “Some will raise the needed capital, but others may find that merging with peers is the only viable option to survive this round of reforms.”
New-Generation and Niche Players in the Spotlight
Newer entrants such as Nova Commercial Bank Ltd, Providus Bank Ltd, Parallex Bank Ltd, Signature Bank Ltd, Optimus Bank, Globus Bank Ltd, SunTrust Bank Nigeria Ltd, and Titan Trust Bank Ltd are also in the race. These institutions, while nimble and innovative, may lack the balance sheet strength of older rivals. For them, mergers and acquisitions are increasingly seen as a likely path to compliance.
A financial analyst observed that, “Banks like Titan Trust and Providus have shown strong ambition, but across the board, not every new-generation lender has the scale to meet the CBN’s capital demand alone. Consolidation in this segment is almost inevitable.”
The Big Five Advantage
Nigeria’s tier-one banks—Access Bank, Zenith Bank, Guaranty Trust Bank, First Bank, and United Bank for Africa (UBA)—are widely regarded as best positioned to scale the recapitalisation hurdle. They are expected to rely on retained earnings, capital injections from foreign investors, and strategic expansions to maintain dominance.
In contrast, the smaller players may be forced into alliances. Market observers already point to discussions quietly taking place behind the scenes, with potential mergers among mid-tier banks and new-generation players expected to reshape the competitive landscape.
The Road Ahead
With less than two years to the CBN’s deadline, the coming months will test not only the fundraising capacity of Nigerian banks but also their strategic agility. For customers, this could mean more robust institutions capable of financing big-ticket projects and weathering economic shocks. For the industry, however, it could mean another dramatic shake-up similar to the consolidation era of the mid-2000s.
As Premium Trust Bank’s early success demonstrates, those who move swiftly to strengthen their balance sheets will not only survive the regulatory hurdle but may also seize opportunities created by the struggles of weaker rivals.
“Recapitalisation is about building banks that can stand shoulder-to-shoulder with global institutions,” said a financial analyst. “The question is: who will be strong enough to lead, and who will be forced to merge?”
For Nigeria’s banking sector, the recapitalisation wave is more than a compliance exercise—it is a defining moment that will determine the future shape of the industry for the next decade.
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