Nigeria’s mid-sized banks – Wema Bank, Sterling Bank, First City Monument Bank (FCMB), Stanbic IBTC Bank, and Fidelity Bank – are under mounting pressure to scale up operations as the Central Bank of Nigeria’s (CBN) 2026 recapitalisation deadline looms.
A new report by SB Morgen (SBM) Intelligence warns that failure to meet the apex bank’s capital requirements could force some tier-2 lenders into mergers or strategic partnerships. Titled “Capital, Competition, and Consolidation: How Nigeria’s Tier-2 Banks Are Responding to the CBN’s 2026 Recapitalisation Order,” the report predicts a transformative shake-up in the banking sector.
Join our WhatsApp ChannelThe CBN announced in March 2024 that international banks must raise their capital base to ₦500 billion, national banks to ₦200 billion, and regional banks to ₦50 billion by March 2026. The policy aims to strengthen financial stability and prepare the sector to support Nigeria’s ambition of building a $1 trillion economy.
SBM’s analysis highlights the performance of Nigeria’s tier-2 banks over the past five years, showing resilience amid regulatory changes, economic volatility, and recapitalisation pressures.
Fidelity Bank, for example, saw its share price soar from ₦1.65 in 2020 to ₦21.20 by mid-2025 an increase of more than 1,100 percent driven by strong earnings, digital expansion, and aggressive capital raising. Wema Bank followed a similar trajectory, rising from ₦1.50 to nearly ₦15.00. FCMB and Sterling Bank also recorded steady gains, reflecting growth in retail and SME banking and disciplined asset management.
To meet the new capital thresholds, each bank has adopted unique strategies:
- FCMB Group plans to raise ₦400 billion in three phases, including a public offer, private placements, and offshore preference share issuances. Its initial public offer of ₦144.6 billion was oversubscribed by 33 percent.
- Fidelity Bank has raised over ₦270 billion through public offers and rights issues and plans further capital injections to surpass the ₦500 billion benchmark for international banks.
- Sterling Financial Holdings is pursuing private placements, rights issues, and a $400 million public offering.
- Wema Bank combines a ₦150 billion rights issue with a ₦50 billion private placement after completing a ₦40 billion issue in 2023.
READ ALSO: The PDP Predicament: A Party at Crossroads According To Festus Keyamo
Media Warned of Complicity in Wike’s Verbal Attacks, Joe Keshi Speaks Out
SBM predicts a wave of consolidation among mid-tier lenders as the 2026 deadline approaches. The report notes that strong earnings at FCMB, robust capital market performance at Fidelity, and digital transformation at Wema reflect a dynamic and adaptable sector.
Despite rising funding costs and pressure to diversify income sources, tier-2 banks have maintained profitability, efficiency, and asset quality, the report concluded. Survival in the coming years will depend on their ability to execute bold capital-raising strategies, leverage technology, and navigate regulatory demands.
As Nigeria’s banking sector prepares for consolidation, investors and customers alike may see mergers, strategic alliances, and stronger, digitally driven banks emerging from the mid-tier segment.
Amanze Chinonye is a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria. With a unique voice that blends tradition with modernity, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday Nigerian life, from the bustling markets of Lagos to the quiet villages of the countryside. With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
