Nigeria banks raise up to N5trn, face strict CBN oversight
Nigerian lenders have secured up to N5 trillion in fresh capital, but the central bank warns that tighter supervision and rigorous risk management must accompany any expansion into corporate lending.
The Central Bank of Nigeria (CBN) completed a banking sector recapitalisation exercise in March 2026, raising between N4 trillion and N5 trillion across 33 licensed banks. The programme was designed to fortify the financial system against economic shocks after the significant devaluation of the naira and previous regulatory forbearance exposed critical vulnerabilities.
Despite this capital injection, CBN Governor Olayemi Cardoso signalled that regulatory scrutiny will not ease. Speaking at the BusinessDay 14th Annual CEO Forum in Lagos, he warned investors and executives that stronger balance sheets do not equate to lighter oversight.
“Our oversight on banks does not stop at the fact that you have raised capital. No, it’s going to be continuous because we need a strong, resilient banking sector to be able to take us to where we want to go,” Cardoso said.
The capital raise encountered significant industry resistance initially. “There was an enormous amount of pushback and all that kind of stuff,” Cardoso said. “Our belief at the time was that we needed to build resilience in our banking system.”
For market participants, the immediate focus is how lenders will deploy the new capital. Nigerian banks currently channel a significant portion of their funds into government securities, such as treasury bills. However, Cardoso indicated this sovereign bias will ease as macroeconomic conditions stabilise.
“In the course of time, when all these different actions begin to settle, we believe inflation will come down, interest rates will come down. It will be a different ball game,” he said. “The environment has changed, and it is going to be an opportunity for those who have the capacity.”
A shift toward financing businesses, including small and medium-sized enterprises, would support broader economic growth. Nigerian banks maintain a dominant footprint across the African continent, a regional presence that requires substantial capital to sustain.
However, the governor explicitly cautioned against pressuring banks to lend indiscriminately. He pointed to recent challenges involving lender exposures, particularly in the oil and gas sector, as a warning against poor underwriting standards.
“Banks don’t take risks, or they shouldn’t take risks that will put them in trouble. They take risks that are well thought through, well analysed, and protect them. Because at the end of the day, they hold depositors’ money,” Cardoso said.
To facilitate a safe expansion of credit, the central bank plans to assist institutions in developing the necessary analytical frameworks. “Some of these areas are hugely specialised where you need extremely sophisticated skills to be able to manage them, and that is something which we at the Central Bank are determined to work closely with the banking system to help them to develop that skill base,” he added.
