Nigerian banks are ramping up capital-raising efforts to comply with new Central Bank of Nigeria (CBN) regulations, with tier-1 banks already securing over ₦1 trillion through the stock market. Meanwhile, smaller banks, including Polaris and Keystone, are exploring mergers to meet the March 31, 2026, deadline.
Multiple sources confirm that at least three banks are in early-stage merger discussions, though exact capital shortfalls remain unclear. Polaris Bank, which reported a capital base of ₦50.43 billion in 2022, must raise ₦150 billion to meet the new ₦200 billion requirement for national banks. The exclusion of retained earnings from qualifying capital adds further pressure. While Keystone Bank’s financials are unavailable, it is expected to face similar challenges.
Bank mergers have long been a solution to recapitalization challenges, a trend likely to continue. In August 2024, the CBN approved a merger between Unity Bank and Providus Bank, forming a new entity with a balance sheet of up to ₦3 trillion. The last major recapitalization in 2004 reduced Nigeria’s banks from 89 to 25. Moody’s predicts significant consolidation under the new rules, while KPMG notes that concerns over ownership dilution and cultural mismatches may hinder mergers, though some banks will have no choice.
Both Polaris and Keystone have faced regulatory scrutiny. In January 2024, the CBN dismissed their boards, alongside Union Bank’s, over regulatory infractions and corporate governance failures. A special investigation alleged that former CBN governor Godwin Emefiele acquired Union Bank and Keystone through proxies using illicit funds.
The CBN argues that stronger banks are essential to Nigeria’s goal of a $1 trillion economy by 2030, a key priority for President Bola Ahmed Tinubu’s administration. Well-capitalized banks are expected to expand credit to individuals and businesses, strengthening the economy.
Meanwhile, Nigeria’s top banks are meeting the new capital requirements through fresh fundraising. GTCO raised ₦209 billion in early 2025 as part of its recapitalization plan, while Zenith Bank secured ₦350.4 billion through a rights issue and public offer.
