Nigeria’s mid-tier lenders — Wema Bank, Sterling Bank, First City Monument Bank (FCMB), Stanbic IBTC Bank, and others — are under mounting pressure ahead of the Central Bank of Nigeria’s (CBN) 2026 recapitalisation deadline.
A new report by SBM Intelligence warns that unless these institutions scale up operations and aggressively raise capital, they may be forced into mergers or risk losing competitiveness in a rapidly consolidating market.
The report, titled “Capital, Competition, and Consolidation: How Nigeria’s Tier-2 Banks Are Responding to the CBN’s 2026 Recapitalisation Order”, highlights how the policy will reshape Nigeria’s banking landscape, determining which lenders remain resilient and which may be pushed out.
CBN’s Recapitalisation Policy
In March 2024, the CBN mandated that:
International banks must raise their capital base to ₦500 billion
National banks to ₦200 billion
Regional banks to ₦50 billion
The apex bank set March 2026 as the compliance deadline, noting that the policy is designed to strengthen financial stability and prepare the sector to support Nigeria’s ambition of building a $1 trillion economy.
Share Price Performance and Resilience
Fidelity Bank’s share price surged from ₦1.65 in 2020 to over ₦21.20 by mid-2025 — a rise of more than 1,100%, powered by strong earnings, digital expansion, and aggressive capital raising.
Wema Bank climbed from ₦1.50 in 2020 to nearly ₦15.00 in 2025, driven by digital transformation.
FCMB grew from ₦3.33 in 2020 to ₦9.25 by mid-2025.
Sterling Bank tripled from ₦1.70 to ₦6.16, supported by growth in retail and SME banking.
While Tier-1 banks have recorded record profits, SBM noted that some Tier-2 lenders have outperformed expectations, demonstrating adaptability in a challenging market.
Capital-Raising Strategies
Each bank is pursuing different strategies to meet the new capital requirements:
FCMB Group plans to raise ₦400 billion in three phases, starting with an oversubscribed ₦144.6 billion public offer, followed by convertible notes, IPOs, private placements, and offshore deals.
Fidelity Bank has already raised over ₦270 billion and secured shareholder approval to increase share capital, positioning itself to surpass the ₦500 billion benchmark.
Sterling Financial Holdings is working on rights issues, private placements, and a $400 million public offering.
Wema Bank is combining a ₦150 billion rights issue with a ₦50 billion private placement, following a successful ₦40 billion issue in 2023.
Outlook: Consolidation Looms
SBM Intelligence predicts a wave of consolidation as the deadline approaches, with mergers and alliances likely among mid-tier lenders.
“The financial performance of these mid-tier banks in 2025 underscores their capacity to compete and thrive, even as Tier-1 institutions consolidate their dominance,” the report said.
Despite challenges such as rising funding costs and the need for greater non-interest income, SBM concluded that Tier-2 banks are at a critical juncture — with survival dependent on how effectively they leverage technology, manage regulatory demands, and execute bold capital-raising strategies.