It’s only 15 months to recapitalisation deadline, and banks have stepped up preliminary consultations on the prospect of business combinations.
The ongoing recapitalisation is heading down to more competitive capital raising ahead of the March 31, 2026 deadline.
As of the last count, only three banks have met the new capital requirements stipulated by the Central Bank of Nigeria (CBN).
Investment banking sources yesterday said there have been “more talks around mergers and acquisitions” as banks consider alternative options to fresh capital raising.
They said while the banks are expected to flood the market with offers, many of them have seen the inevitability of mergers and acquisitions.
The CBN had approved the first mergers and acquisition deal between Providus Bank and Unity Bank in 2024.
Sources, who pleaded anonymity because of business interest, described the investment banking environment’s mood as “contemplative”, with bank chiefs and stakeholders weighing options for the next few months.
Banks were said to be concerned with the painstaking capital verification exercise by the apex bank, which has placed additional burden of proof on banks, in addition to the tedious fund-raising campaign.
The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation (NDIC).
The committee is saddled with scrutinising new funds being raised by the banks under the ongoing recapitalization.
“Most banks are looking at both share offering and business combinations now, all options are on the table. The most important consideration now is to scale the hurdle, as a standalone or in combined entity,” a senior investment banking source said.
Another source said the recapitalisation would continue to dominate the primary market in the months ahead.
“The primary market will be a beehive of activities this year considering the increased number of banks we are expecting,” another senior investment banker and analyst said.
