Nigeria’s mid-tier lenders are under mounting pressure to scale up operations or face mergers as the Central Bank of Nigeria (CBN) enforces its 2026 recapitalisation programme, a new report has revealed.
The report, released by SBM Intelligence and titled “Capital, Competition, and Consolidation: How Nigeria’s Tier-2 banks are responding to the CBN’s 2026 recapitalisation order,” examined the financial health and capital-raising efforts of First City Monument Bank (FCMB), Fidelity Bank, Stanbic IBTC, Sterling Bank, and Wema Bank.
In March 2024, the CBN directed banks to increase their minimum capital base by 2026. Under the new rule, international banks must raise ₦500 billion, national banks ₦200 billion, and regional banks ₦50 billion. The apex bank said the measure will boost financial stability and prepare lenders to support the government’s ambition of building a $1 trillion economy.
Share price rally
The SBM report highlighted how some tier-2 banks have outperformed expectations in recent years. Fidelity Bank’s share price rose from ₦1.65 in 2020 to over ₦21.20 by mid-2025, representing more than 1,100 percent growth. Wema Bank also recorded a surge from ₦1.50 to nearly ₦15.00 over the same period.
FCMB and Sterling Bank posted steady gains, while Stanbic IBTC maintained resilience despite macroeconomic volatility.
Capital-raising strategies
To meet the recapitalisation target, FCMB has embarked on a three-phase plan to raise ₦400 billion through public offers, divestments in subsidiaries, and offshore placements. Fidelity Bank has already secured over ₦270 billion from an oversubscribed rights issue and public offer, with plans to complete the process ahead of schedule.
Sterling Financial Holdings is pursuing a mix of rights issues, private placements, and a $400 million public offering, while Wema Bank has combined a ₦150 billion rights issue with a ₦50 billion private placement after an earlier ₦40 billion issue in 2023.
Mergers expected
SBM predicted that consolidation in the banking sector will intensify as the 2026 deadline approaches, with mergers and alliances likely among mid-tier lenders.
“The financial performance of these banks in 2025 underscores their capacity to compete and thrive, even as Tier-1 institutions consolidate their dominance,” the report noted.
It added that the ability of tier-2 banks to adapt to regulatory demands, strengthen technology adoption, and implement bold capital strategies will determine their future in Nigeria’s evolving financial sector.