There is a loud silence from some commercial banks expected to achieve the new minimum capital base benchmark set by the Central Bank of Nigeria (CBN) as the race to the June 2026 deadline heats up.
Banks like GTCO, Fidelity, Zenith and Access have concluded their capital-raising plans, while other big lenders like Sterling Bank are approaching the finishing line.
However, some banks like Polaris and Providus Banks (merged with Unity) have either been silent about their progress or faced hurdles in meeting the CBN’s recapitalisation directive.
The CBN raised the minimum capital base for commercial banks holding national authorisation to N200 billion, and those with regional authorisation to N50 billion.
Banks with international authorisation now need N500 billion as the minimum capital to retain their licenses.
Cumulatively, banks with international licenses require at least N2.2 trillion to reach the capitalisation requirements, while those with national licences need N1.6 trillion in additional capital to get them to target, according to Afrinvest’s 2024 Banking Sector Report.
Five early-bird banks that approached the Nigerian bourse for capital have raised approximately N1.27 trillion.
Read also: Nigeria’s foreign investments rising on proposed bank recapitalisation -Cardoso
Here are some banks delaying their recapitalisation process
First Bank of Nigeria Holdings
First Bank of Nigeria Holdings (FBNH), the parent company of Nigeria’s oldest bank, is yet to receive shareholders’ approval to raise additional capital base due to an unsettled legal battle with some shareholders since 2021.
The bank was supposed to get approval to raise N350 billion through a public offering, rights issue or private placement at its August Annual General Meeting (AGM), which has not been held.
“FBNH would require a minimum additional equity funding of about N248.7 billion before the end of the recapitalisation window in June 2026, to maintain its international license,” according to Afrinvest’s Banking Sector Report.
United Bank for Africa
United Bank for Africa is still awaiting approval from the Securities Exchange Commission (SEC) on its recapitalisation plans with approval expected soon.
It also recently got shareholders’ approval to raise additional capital through a multi-tranche, multi-instrument strategy, allowing UBA to substantially raise more than necessary to surpass the new minimum capital base.
“The Group would require an additional N384.2 billion equity capital to maintain its international license as the group’s total capital stands at N115.8 billion as of FY: 2023,” Afrinvest said.
Analysts expect UBA to be in the market before the year ends or early in 2025.
Ecobank Transnational Incorporated
Ecobank Transnational Incorporated (ETI), the parent company of the Ecobank Group, received shareholders’ approval to raise N840 billion ($600 million) as additional capital to meet the CBN’s recapitalisation directive.
This will be raised through senior-ranked debt, tier 2-qualifying subordinated debt or a combination of these instruments rather than the local capital market.
ETI recently issued $400m bonds at a 10.125 percent interest rate.
Providus Bank & Unity Bank
Providus Bank merged with Unity Bank, shortly after the CBN directed lenders to shore up their capital base.
Providus Bank, the healthier of the two, has shareholders’ funds exceeding N96.2 billion and total assets of N1.5 trillion as of December 2023.
The bank also grew its assets by 189 percent in three years from N543 billion in 2021. The CBN injected a 20-year tenured loan of N700 billion to aid the new banking entity.
Polaris, Union, & Keystone Banks
In January, the CBN dissolved the boards and management of Union Bank, Keystone Bank, and Polaris Bank over regulatory non-compliance, and corporate governance failures, among other reasons.
The CBN appointed Yetunde Oni as the managing director/chief executive officer shortly after.
In September, the CBN appointed a new board for Polaris Bank, headed by Kassim Gidado, and Keystone Bank, chaired by Ada Chukwudozie.
Read also: Race to 2026 bank recapitalisation: Meet the CFOs of top merchant and non-interest banks in Nigeria
No official statements yet
Despite the banks’ race to raise capital before the CBN’s deadline, certain banks have not yet published official statements on their recapitalisation plans.
Some include Optimus Bank, Parallex Bank, Premium Trust Bank, Signature Bank, SunTrust Bank, and Titan Trust Bank.
“They might not announce their plans, but they are planning towards raising additional capital if they wish to retain their licenses,” a banking expert, who did not wish to be named, said.
Afamuefuna Chukwurah, research analyst, Capital Bancorp Plc, said that naira devaluation and current market sentiments may prompt the silent banks to reassess their capital structures.
“Some banks may be reticent to announce their plans due to ongoing negotiations with potential investors. They could be considering private placements or focused on attracting foreign investments,” he said.
Analysts at Cardinal Stone expect some silent banks to show up in the market before the end of the fourth quarter or in the first quarter of 2025.
“If the banks are using the capital market route, they have to give the market time to buy into their rights issues or public offers. But if it’s a private placement, they don’t need to disclose that. If they’re not in the market next year, they’re exploring other plans,” they said.
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