Nigeria’s banking industry is projected to enter a forced round of mergers and acquisitions in 2026, as lenders scramble to meet the Central Bank of Nigeria’s recapitalisation deadline.

According to SBM Intelligence, consolidation is expected to define the banking landscape in 2026, driven largely by capital shortfalls across parts of the sector.

The firm stated in its 2026 Outlook Report that “a forced round of mergers and acquisitions will occur due to the banking recapitalisation deadline, with some banks failing to meet requirements.”

In November 2025, the Governor of the Central Bank of Nigeria, Yemi Cardoso, disclosed that 16 banks had fully complied with the recapitalisation directive.

Although the CBN governor did not name the banks, a review by BusinessDay showed that three of the seven banks with international licences had already met the N500 billion minimum paid-up share capital requirement.

The banks identified as having met the requirement are Access Bank, GTBank and Zenith Bank.

United Bank for Africa is also expected to cross the threshold following its N157.8 billion rights issue.

For FCMB Group, the situation remains tight, despite the recently concluded N160 billion public offer.

Even if the public offer is fully subscribed, FCMB would still require about N52 billion to reach the N500 billion benchmark.

The bank has, however, indicated plans to divest minority stakes in some of its non-banking subsidiaries as part of efforts to bridge the capital gap and complete its recapitalisation programme.

At Fidelity Bank, a private placement of 20 billion shares remains under consideration.

Although shareholders approved the private placement in February 2025, the bank has yet to take concrete steps to execute the plan.

First Holdco raised N150 billion through a 2024 rights issue, pushing its share capital to N398 billion.

Market expectations suggest that proceeds from the planned sale of FBNQuest Merchant Bank could be channelled towards the recapitalisation of First Bank of Nigeria.

Beyond this, forced mergers are increasingly being anticipated among banks operating with national licences.

Among national licence holders, Wema Bank, Globus Bank, Premium Trust Bank, Stanbic IBTC and Standard Chartered have already met the N200 billion minimum share capital requirement.

Sterling Bank is awaiting regulatory approval to conclude its recapitalisation, with its N88 billion public offer expected to comfortably cover its N43 billion capital shortfall.

Within Sterling Holdco, its non-interest banking subsidiary, Alt Bank, is also advancing its recapitalisation drive.

Alt Bank initially received a N5 billion capital injection from the N73.86 billion raised in Sterling’s 2024 rights issue.

Following the completion of Sterling Bank’s public offer, further capital injections into Alt Bank are expected.

The banking industry has already witnessed its first major consolidation, with Union Bank merging with Titan Trust Bank.

Based on publicly available financial records, the combined share capital of the two banks stands at N177.3 billion, leaving a deficit of N22.7 billion.

However, the figures are derived from Titan Trust Bank’s 2021 records and Union Bank’s 2024 accounts, indicating that the actual capital position may have changed.

Providus Bank is next in line, with plans to merge with Unity Bank.

Once completed, the transaction is expected to create the ninth-largest bank in Nigeria by asset size and branch network.

Some banks are opting for strategic realignments rather than outright mergers.

Nova Bank, for instance, has downgraded its licence to a regional banking licence, which carries a lower minimum capital requirement of N50 billion.

Among Nigeria’s 14 national banks, the recapitalisation strategies of Keystone Bank and Polaris Bank remain unclear, with no definitive public disclosures on how they intend to meet the new capital thresholds.

Beyond capital adequacy, SBM Intelligence also projects that the CBN will further tighten prudential, risk management and anti-money laundering regulations.

This is in line with the regulator’s broader effort to strengthen financial system stability and align Nigerian banks with global supervisory standards.

Following Nigeria’s recent removal from the Financial Action Task Force Greylist, SBM projects that the CBN will intensify efforts to reduce vulnerabilities linked to illicit financial flows and foreign exchange compliance.

As a result, banks are expected to face rising compliance and operational costs, particularly in transaction monitoring, reporting systems and senior compliance staffing.

In line with this trend, Jaiz Bank recently announced the appointment of Tukur Galadima as its Chief Compliance Officer.

Galadima previously served as an Assistant Director at the Central Bank of Nigeria until 2024.

The appointment highlights the increasing premium Nigerian banks are placing on regulatory expertise as supervision intensifies.