Nigeria's banks face stricter rules after record recapitalisation push
Nigeriaâs banking sector has undergone a major recapitalisation drive over the past two years. The Central Bank of Nigeria (CBN) pushed 33 banks to raise a combined N4.65 trillion, aiming to strengthen the industryâs financial health. Now, with many lenders reporting strong profits for 2025, regulators are shifting focus to stricter prudential rules. The CBNâs recapitalisation programme began in 2023, requiring banks to boost their capital buffers. By the end of 2024, the industryâs exposure to the oil and gas sector alone stood at roughly N21 trillion. Despite the push for growth, regulators held back approval for some dividend payouts until banks fully complied with the Banks and Other Financial Institutions Act (BOFIA).
Several major lenders posted solid earnings for the 2025 financial year. Yet, rising loan defaults cast a shadow over the results. United Bank for Africa (UBA) set aside N331 billion for loan-loss provisions, while Access Holdings saw its impairment charges surge by 209% to N287.3 billion. Across tier-one and tier-two banks, total impairment charges for the year reached about N2.16 trillion.
To tackle bad debts, some banks have taken legal action, freezing assets and filing for receivership on troubled loans. The CBN is now prioritising capital quality, demanding accurate loan valuations, faster loss recognition, and stronger depositor protections before allowing shareholder distributions. The recapitalisation drive has laid the groundwork for a more stable banking system. With stricter oversight on loan quality and risk management, the CBN aims to ensure long-term resilience. The goal remains a sector capable of delivering sustainable returns while safeguarding depositorsâ interests.
