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  • Banks’ valuation rises to N17tr on recapitalisation

    Banks’ valuation rises to N17tr on recapitalisation

    The total market value of publicly listed banks has quadrupled as new capital raisings and capital gains lifted banks’ market capitalisation to above N17 trillion.

    Market data reviewed yesterday showed that banks’ valuation, which stood at less than N4 trillion prior to the recapitalisation exercise, closed weekend at more than N17 trillion.

    While the structure of the banks’ positions on the capitalisation table remained largely unchanged, most banks have seen three-digit growth in capitalisation, with Wema Bank recording the highest percentage growth of 1,686 per cent during the period.

    The data from the Nigerian Exchange (NGX) and analysed by The Nation’s Market Intelligence covered the period between February 23, 2023 and January 23, 2026. The ongoing recapitalisation programme was formally launched in March 2024, after initial head up by the Central Bank of Nigeria (CBN).

    At the beginning of the period, all banks were valued below the trillion naira mark, but half of the banks in the survey are now valued substantially above trillion naira.

    Banks with highest valuations included Guaranty Trust Holding Company (GTCO), N3.588 trillion; Zenith Bank, N2.916 trillion; First HoldCo, N2.178 trillion; United Bank for Africa (UBA), N1.940 trillion; Stanbic IBTC Holdings, N1.717 trillion; Access Holdings, N1.194 trillion and Ecobank Transnational Incorporated, which opens today with market value of N1.115 trillion.

    At the beginning of the period,  GTCO, Zenith Bank, First HoldCo, UBA, Stanbic IBTC Holdings, Access Holdings and Ecobank Transnational Incorporated were valued at N745 billion, N796 billion, N416 billion, N287 billion, N447 billion, N325 billion and N220 billion respectively.

    Read Also: All eyes on banks as N4.14 trillion recapitalisation drive heats up

    Wema Bank, which had seen the highest rise in capitalisation, had risen from N51 billion to N911 billion. Fidelity Bank has also risen from N146 billion to N954 billion. FCMB Group, which was initially valued at N85 billion, currently has a market value of N500 billion.

    The increase in market capitalisation comes from both new capital raisings and sustained price appreciation due to positive sentiments for banking stocks.

    Managing Director, GTI Capital Limited, Mr Kehinde Hassan, said the remarkable change in banks’ capitalisation underlined the success of the recapitalisation exercise.

    According to him, the sector-wide improvements in value showed the resilience of the banking sector as banks of all cadres were able to successfully increase their capital base.

    He added that the data reflected investors’ confidence in the banking sector and the overall outlook of the financial services sector and the economy.

    He said: “Such a high increase in minimum capital base could have played out in two ways- investors bailing out for fears of bank failing or investors digging in to increase their stakes. For most banks, investors were willing to increase stakes, even at higher prices. That’s how to measure confidence”.

    In March 2024, the CBN released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion.

    Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026.    

    Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds.

    Ahead of the March 31, 2026 deadline, Governor of Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, in his last public update on the recapitalisation exercise, confirmed that 16 banks have met their new capital requirements. He also indicated that 27 other banks were raising funds.

    Deputy Governor, Economic Policy, Central Bank of Nigeria (CBN), Dr Muhammad Abdullahi, said not less than 20 banks have met the new capital requirements. Abdullahi’s comment came on the heels of recent public confirmations by United Bank for Africa (UBA), Fidelity Bank and First Bank that they’ve met their new capital requirements after final clearance of their latest capital raisings.

    Nigeria currently has 44 deposit-taking banks across various licence categories.

  • All eyes on banks as N4.14 trillion recapitalisation drive heats up

    All eyes on banks as N4.14 trillion recapitalisation drive heats up

    The ongoing recapitalisation of banks ranks among the most ambitious reforms undertaken by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso. The initiative reflects the apex bank’s commitment to regulatory excellence and a stronger financial system. So far, 20 of the 44 banks have met the minimum capital requirement, with lenders expected to raise a combined N4.14 trillion by the March 31 deadline. Assistant Editor COLLINS NWEZE reports that the exercise underscores the CBN’s resolve to build a resilient banking sector

    In less than three months, the ongoing recapitalisation of Nigerian banks through capital raising is expected to be concluded, with an estimated N4.14 trillion projected to be mobilised across the sector by the time the exercise is completed. One of the most significant outcomes of the programme is the emergence of stronger, better-capitalised banks with the capacity to undertake large-scale transactions capable of supporting businesses and driving broader economic growth. By strengthening balance sheets, the exercise is designed to position Nigerian banks to play a more decisive role in financing critical sectors of the economy.

    The Central Bank of Nigeria (CBN), under the leadership of its Governor, Olayemi Cardoso, has consistently maintained that sustainable economic growth is impossible without a robust and well-capitalised financial system. In line with this conviction, the apex bank is working to align monetary and fiscal policies in support of the Federal Government’s ambition to expand business activity and grow the economy to a $1 trillion valuation.

    For the CBN leadership, this ambition is inseparable from the need to entrench a strong culture of compliance and reinforce risk management frameworks across the financial system. Cardoso has emphasised that protecting the integrity of Nigeria’s banking sector while enhancing its resilience and credibility—both domestically and internationally—remains a central priority. To this end, the apex bank has reaffirmed its commitment to sustaining a transparent, stable, and resilient financial system by tightening regulatory oversight and strengthening compliance and risk management practices across Nigerian financial institutions.

    Milestones assessment for recapitalisation

    Ahead of the March 31 deadline, Cardoso, in his last public update on the recapitalisation programme, confirmed that 16 banks have met their new capital requirements. He also indicated that 27 other banks were raising funds. Deputy Governor, Economic Policy, CBN, Dr. Muhammad Abdullahi, who spoke last week at Nigeria Economic Summit (NESG) forum said not less than 20 banks have met the new capital requirements.

    Nigeria currently has 44 deposit-taking banks across various licence categories. At least seven other banks are weighing the option of scaling down their licence from national to regional bank, given the concentration of their operations and the almost equal ubiquitous advantage offered by Nigeria’s expansive digital banking. Another bank, which currently holds an international banking licence, indicated over the weekend that it could be scaling down to a national banking license in the immediate period before the deadline, while pursuing further recapitalisation to boost its capital base and regain its international banking authorisation.

    The apex bank categorises banks into three broad categories – international, national, and regional – based on their financial strength. Under the recapitalisation guidelines, beyond raising funds, banks are required to subject their new equity funds to capital verification before the clearance of the allotment proposal and release of the funds to the bank for onward completion of the offer process and addition of the new capital to its capital base.

    The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation programme.

    N4.14 trillion to be raised

    With expected N4.14 trillion new capital being raised and 20 banks already met the minimum capital requirement, this year will turn out a significant milestone in the economy. The CBN had, on March 28, 2024, announced a two-year bank recapitalisation exercise which commenced on April 1, 2024. The recapitalisation plan requires minimum capital of N500 billion, N200 billion and N50 billion for commercial banks with international, national and regional licences respectively. The 24-month timeline for compliance ends on March 31, 2026.

    Cardoso said the apex bank will be enforcing stronger governance, greater transparency, and firmer accountability to protect raised funds. He disclosed that several banks have already met the new capital thresholds, while others are advancing steadily and are well positioned to comfortably meet the March 31, 2026 deadline. Banks meeting or exceeding the new requirements is a clear testament to the depth, resilience and capacity of Nigeria’s banking sector,” Cardoso stated.

    The CBN has equally established a dedicated Compliance Department, now fully operational, with mandates covering financial crime supervision, market conduct, enterprise security, corporate governance, and Environmental, social, and governance (ESG). According to the CBN boss, the process of enforcing stronger controls on raised funds is ongoing with the redesigning of the credit‑risk framework expected to ensure that raised funds are well managed by financial institutions. Previously, banks were awash with post recapitalisation funds, with analysts predicting that without proper risk management policies and regulatory controls, chances of misapplying such raised funds through risky loans remain high.

    To guard against such occurrence, Cardoso stated: “As recapitalisation progresses, we are redesigning the credit‑risk framework to enforce stronger governance, greater transparency, and firmer accountability across the sector. We are determined to break the boom‑and‑bust cycle that has accompanied past recapitalisation efforts.”

    Already, the CBN Credit Risk Management System (CRMS) is web-enabled, allowing banks and other stakeholders to dial directly into the CRMS database to render statutory returns or conduct status enquiry on borrowers. Also, the CBN is in the process of integrating the CRMS with other systems operating in the banks to make it more efficient.

    In a report titled: “Nigeria’s macro headwinds trigger bank recapitalisation” Deloitte, a global accounting and audit firm, put the total funds to be raised in the recapitalisation exercise which ends on March 31, 2026 at N4.14 trillion. It said the upward review of banks’ capital base from N50 billion to N500 billion depending on the type of licence held by the bank, remains an essential action required to boost capital adequacy needs of the Nigerian financial industry.

    Nigeria banks’ capital adequacy, the report says, has been significantly impacted by macroeconomic challenges such as high inflation and interest rates, currency volatility and forex illiquidity. “The upward revision will ensure that Nigerian banks have the capacity to take on bigger risks and stay afloat amid both domestic and external shocks. It also means increased liquidity position of banks, which will help broaden their loss-bearing capabilities,” the report said.

    Continuing, Cardoso said Nigeria’s banking system remains fundamentally sound and resilient, a cornerstone of our financial stability. “At the same time, we remain vigilant to emerging risks, including cyber threats, credit-concentration pressures, and operational vulnerabilities. These are being addressed through strengthened risk-based supervision and our ongoing transition to Basel III, which will further bolster resilience, improve capital quality, and strengthen liquidity monitoring,” he said.

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    The CBN boss disclosed that with just four months to the conclusion of the recapitalisation exercise, the recapitalisation process remains firmly on track. “As we strengthen the capacity of our banks, stress-testing this year confirms that Nigeria’s banking sector remains fundamentally robust. Key financial soundness indicators overwhelmingly satisfied prudential benchmarks during the year,” Cardoso added.

    He said the apex bank is reinforcing operational discipline to ensure the financial system serves all Nigerians reliably. “Our starting point was a comprehensive, end‑to‑end review of the entire cash lifecycle: from production, to transportation, to distribution, and eventual access by consumers. This holistic assessment enabled us to address root causes rather than symptoms.

    “As a result, we recalibrated our cash‑printing models, issued guidelines on the optimal ATM‑to‑card ratio, strengthened requirements for CBN approval before ATM or branch closures, enforced sanctions on banks whose ATMs fail to dispense cash, and intensified supervision of payment agents and POS operators nationwide,” he said.

    Speaking recently to bankers, Cardoso said the ethics and professionalism of bankers and treasurers are under constant scrutiny. According to him, the apex bank introduced the FX Global Code for all authorized dealers and market participants to ensure full compliance with regulations. He urged the Chartered Institute of Bankers of Nigeria (CIBN) to take the lead in upholding and demonstrating the highest standards in the industry. “At the Central Bank, we have intensified surveillance of market activities to ensure compliance and eliminate bad actors who attempt to undermine the system. Together, we must build a market based on strong governance and transparency. As regulators, we will maintain a zero-tolerance approach to compliance violations,” he said.

    The Group Managing Director of United Bank for Africa (UBA), Mr. Oliver Alawuba described the ongoing CBN bank recapitalisation policy as both timely and essential in positioning the financial system to meet the demands of a growing and globally competitive economy. According to Alawuba, the initiative is expected to boost the resilience of the banking sector by strengthening its capacity to withstand economic shocks such as inflation, currency volatility and global geopolitical disruptions. He noted that the policy will also place Nigerian banks on a stronger footing to finance the country’s long-term economic transformation, including funding of large-scale infrastructure and industrial projects.

    Alawuba further stressed that the recapitalisation policy goes beyond regulatory compliance. It is a forward-looking strategy aimed at equipping Nigerian banks to operate at the scale and sophistication required by a trillion-dollar economy. He said the move would enhance the sector’s ability to support traditional economic drivers such as oil and gas, agriculture and manufacturing, as well as emerging sectors such as fintech, green energy and infrastructure development. “Nigerian banks need adequate capital buffers to meet the evolving demands of these sectors. Without this, the industry cannot effectively rise to the challenge,” he said.

    Building resilient banking system

    Cardoso earlier explained that within the banking sector, the sector remains robust with key indicators reflecting a resilient system. “The non-performing loan ratio remains within the prudential benchmark of five per cent, showcasing strong credit risk management. The banking sector liquidity ratio comfortably exceeds the regulatory floor of 30 per cent, a level which ensures banks are maintaining adequate cash flow to meet the needs of customers and their operations. The recent stress test conducted also reaffirmed the continued strength of our banking system,” he said.

    To ensure that our banking system can effectively support the growth of our economy, efforts to strengthen banks’ capital buffers were announced in 2023 with a two-year implementation window. “I am pleased to note that a significant number of banks have raised the required capital through right issues and public offerings well ahead of the 2026 deadline! I believe that the banking sector is in a strong position to support Nigeria’s economic recovery by enabling access to credit for MSMEs and supporting investment in critical sectors of our economy,” he said.

    Cardoso explained that the banking sector remains robust, with key indicators reflecting a resilient system. “The non-performing loan ratio remains within the prudential benchmark of five per cent, showcasing strong credit risk management. The banking sector liquidity ratio comfortably exceeds the regulatory floor of 30 per cent, a level which ensures banks are maintaining adequate cash flow to meet the needs of customers and their operations. The recent stress test conducted also reaffirmed the continued strength of our banking system.

     “I am pleased to note that a significant number of banks have raised the required capital through rights issues and public offerings well ahead of the 2026 deadline. I believe that the banking sector is in a strong position to support Nigeria’s economic recovery by enabling access to credit for MSMES and supporting investment in critical sectors of our economy,” he said.

  • Banks offer 2.7% interest on savings, charge 60% on loans

    Banks offer 2.7% interest on savings, charge 60% on loans

    Bank customers are paying 60 per cent maximum lending rates for loans and getting maximum of 2.7 per cent interest on their savings deposits in banks -deposit money banks (DMBs), the Central Bank of Nigeria (CBN) data has shown.

    The CBN report released at the weekend and backed by the Monetary Policy Committee, explains that it decided that henceforth the lending rates obtainable in all Deposit Money Banks (DMBs) be made public to guide business decisions.

    Its report captured the applicable rates for each of the commercial banks for January. 

    The report, released at the weekend in furtherance of the apex bank’s transparency and full disclosure stance showed that manufacturing, mining and quarrying,  public utilities, finance and insurance as well as construction pay maximum rate  of 60 per cent in some banks.

    Also, oil and gas loans are priced at 46 per cent, capital market loans at 19.5 per cent and power and energy loans priced at 48 per cent per annum.

    Education loans are priced at 23 per cent while loans to government are priced at 19 per cent while rea estate loans are priced at 46.5 per cent.  

    General commerce, borrow at 45 per cent; water supply sewage, waste management and remediation activities borrow at 36 per cent while information and communication borrow at 30 per cent.

    Stakeholders observed that despite 27 per cent monetary policy rate (MPR)- benchmark interest rate-, banks were paying less interest to depositors with rising spread between average term deposit and average maximum lending rates.

    Average interest rate on demand deposits range from 0.48 to 7.33 per cent while average interest on savings deposit range from 2.70 per cent to 8.15 per cent.

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    The spread gap, indicated that customers are paying far higher fee than they are getting from their banks.

    The rising lending rates, analysts said, have led to upward pressure on market rates and cost of production for the manufacturing sector. They insisted that the rate at which a customer is charged for loans is dependent on the perceived risk level attached to such customers. That explains why prime customers get loans at relatively cheaper rates.

    However, the Monetary Policy Rate (MPR), which is the benchmark interest rate at which the CBN lends to the commercial banks, is currently at 27 per cent.

    Speaking at the end of the 303rd Monetary Policy Committee (MPC) meeting, Governor, Central Bank of Nigeria, Olayemi Cardoso, announced the retention of the Monetary Policy Rate (MPR) at 27.0 per cent, adjusted the Standing Facility corridor around the MPR at +50/-450 basis points and retained the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and 75.00 per cent for non-TSA public sector deposits.

    The MPC also kept the Liquidity Ratio unchanged at 30.00 per cent.

    The committee’s decision was underpinned by the need to sustain the progress made so far towards achieving low and stable inflation. The MPC reaffirmed its commitment to a data-driven assessment of developments and outlook to guide future policy decisions.

    Analysts said a lower MPR is expected to consolidate recent macroeconomic gains while providing headroom for credit expansion to the real sector.

    An MPC member, Aku Odinkemelu earlier called for  enhanced coordination between monetary and fiscal authorities to address underlying structural vulnerabilities and proactively manage the significant upside risks to the outlook.

    Despite rising cost of lending, the Nigerian private sector remained in growth territory at the end of 2025 as improvements in customer demand fed through to higher new orders, output and purchasing activity, the Purchasing Managers’ Index (PMI) has shown.

    The report showed that employment also increased, but the rate of job creation remained marginal. Inflationary pressures picked up modestly in December but remained generally close to recent lows. Meanwhile, business confidence improved sharply.

    “The headline figure derived from the survey is the Purchasing Managers’ Index (PMI). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration,” it said.

    It said the headline PMI posted 53.5 in December, little-changed from 53.6 in November and signaling a solid monthly improvement in business conditions as 2025 drew to a close. The latest strengthening in operating conditions was the thirteenth in as many months, and broadly in line with the average for 2025 as a whole.

    Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said: “We now see the Nigerian economy growing by 3.8 per cent year-on-year in 2025 and 4.1 per cent year-on-year in 2026. Both Manufacturing and Services are likely to see higher growth in 2025 compared to 2024 levels, based on the results from the PMI surveys so far this year,” he said.

    He explained that elsewhere, the government has been visible in infrastructure, livestock development, easing trade constraints, and attracting investments in oil & gas and manufacturing.

    “Aside from that, the Dangote refinery is expected to continue to have forward-linkage impact on other sectors of the economy. Additionally, likely lower interest rates in line with lower inflation and exchange rate stabilization should support private consumption and business investments in 2026. Because of these factors, we see more sectors contributing to real GDP growth rate in 2026 compared to 2025, likely translating to an improvement in the quality of lives of the citizens compared to 2025,” he added.

  • Investors await interim dividends by major banks

    Investors await interim dividends by major banks

    Investors are taking positions in major banking stocks ahead of this month’s release of the audited half-year results and interim dividends of major banks.

    Nigeria’s tier-1 banks, including Guaranty Trust Holding Company (GTCO) Plc, Zenith Bank Plc, Access Holdings Plc, United Bank for Africa (UBA), Stanbic IBTC Holding Plc and Fidelity Bank Plc have established a regular pattern of paying dividends twice a year, with interim dividend usually declared on the half-year report.

    The major banks, also known as systemically important banks, control about three-quarters of the banking industry funds and have significant influence on the stock market, where banks are the most actively traded stocks. 

    Regulatory filings reviewed yesterday showed that nearly all the major banks have indicated they would be paying interim dividends on their six-month results, which are currently undergoing review by the Central Bank of Nigeria (CBN). The results, alongside the interim dividends, are expected to be released over the next three weeks.

    Most analysts said they expected the release of interim dividends by the major banks to influence activities at the stock market in the period ahead.

    Managing Director, GTI Capital Limited, Mr. Kehinde Hassan, said the expectations of interim dividends were major factors influencing market behaviours.

    “Speculative trading may intensify as investors position themselves ahead of potential announcements, making September a potentially dynamic month for banking equities on the Nigerian capital market,” Hassan, a multi-asset chartered stockbroker and accountant said.

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    He explained that following the Central Bank of Nigeria’s restriction on interim dividend declarations by banks under the forbearance regime, most affected institutions had taken proactive steps to restructure their balance sheets and reassure the investing public of their intent to exit the forbearance framework by the half-year ended June 30, 2025.

    According to him, the restructuring opened the door for eligible banks to declare interim dividends, although a few could remain under regulatory constraints beyond this period.

    He said: “As a result, investor sentiment is tilting strongly toward banks not under forbearance, with heightened anticipation of dividend payouts. These dividend-eligible stocks are likely to attract increased demand, driving price appreciation and higher trading volumes.

    “Conversely, banks still restricted from declaring dividends may experience waning investor interest, prompting dividend-focused investors to reallocate capital toward more promising alternatives within the sector”.

     Most banks have already submitted their half-year financials and are awaiting regulatory approval for dividend declarations.

     However, the uncertainty surrounding CBN’s final stance could introduce short-term volatility in share prices.

    The board of Zenith Bank stated that it had considered interim dividend payment alongside the approval of the bank’s six-month results.

    The Tony Elumelu-led board of United Bank for Africa (UBA) said it had “approved an interim dividend” for the half-year period, subject to the approval of the CBN.

    Directors of Stanbic IBTC Holdings said they had decided to audit the half-year results of the group, one of the preconditions for declaration of interim payout.

    Access Holdings stated that the audited group financial statements for the six-month period ended June 30, 2025 approved by its board included “the payment of an interim dividend”, which would be announced upon approval by the CBN.

    Under a three-step final process for the release of half-year results and interim dividend recommendations, the board of directors meets to consider and approve the audited financial statements as well as dividend recommendation.

    The board-approved reports are then transmitted to the primary regulator, in the case of financial institutions and other regulated entities. With the receipt of the approval of the primary regulator, the results and dividend recommendations are finally transmitted to the Securities and Exchange Commission (SEC) and the Nigerian Exchange (NGX) for onward  release to the investing public.

     Post-listing rules at the NGX require quoted companies to submit interim or unaudited quarterly report not later than 30 calendar days after the end of the relevant period. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year.

    However, where a company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter. All the leading banks also undertake audit of their half-year accounts. While the deadline for the submission of their accounts was Friday, August 29, 2025, the banks had secured regulatory waiver to extend submission till the end of September 2025.

  • Banks earned N1.695tr from foreign subsidiaries in 2024

    Banks earned N1.695tr from foreign subsidiaries in 2024

    Five Nigerian banks generated a combined N1.695 trillion in pre-tax profit (PBT) in 2024 from their foreign subsidiaries. This accounted for 33.5 per cent of their combined group profit of N5.060 trillion. Despite this strong contribution, Nigerian operations continue to account for the bulk of group earnings. Overall, the groups posted strong performance in 2024, buoyed by policy-induced macroeconomic shifts, such as elevated interest rates and devaluation of the Naira.

    These conditions spurred foreign exchange gains and boosted interest income from loans, advances, and investments in Treasury Bills and bonds. First Holdco, UBA, GTCO, Access Holdings, and Zenith Bank saw their gross earnings rose by 82 per cent Year-on-Year (Y-o-Y), reaching N17.397 trillion in 2024 from N9.55 trillion in 2023.

    This strong top-line growth translated into a 56 per cent YoY rise in pre-tax profit, reaching N5.060 trillion. Zenith Bank generated N187 billion in pre-tax profit from its four foreign subsidiaries in Ghana, Sierra Leone, Gambia, and the UK in 2024. This represents about 14 per cent of the Group’s reported pre-tax profit of N1.327 trillion, down from a 16.5 per cent contribution in 2023.

    While this ranked it fourth among peers, it reflects a relatively strong performance considering its fewer offshore units. Zenith Bank UK led the pack with N84.1 billion in pre-tax profit, up 71.27 per cent YoY, followed closely by Zenith Bank Ghana with N82 billion, also up from N75 billion in 2023.

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    Despite this, Zenith’s Nigerian operations remain dominant, contributing N1.133 trillion out of group’s N1.33 trillion pre-tax profit, representing over 84 per cent contribution.

    For First Holdco Plc, the parent company of First Bank of Nigeria, has six subsidiaries across Africa and one in the United Kingdom.

     The bank also maintains representative offices in China and France, underlining its strategic global presence.

    In its 2024 results,  the group disclosed that its foreign subsidiaries contributed 27.5 per cent of its total pre-tax profit of N796.47 billion.

    This translates to a significant N219.03 billion pre-tax profit generated from international operations. While First Holdco did not provide a detailed breakdown of these earnings, the figure highlights the substantial impact of its cross-border operations on overall performance.

    GTCO’s foreign subsidiaries on the other hand recorded N273 billion in pre-tax profit in 2024, up 109 per cent from N130.66 billion in 2023. This puts the offshore contribution at 21.57 per cent, almost unchanged from the 21.44 per cent recorded in 2023. The group operates in eight countries: Ghana, Liberia, Kenya, Tanzania, Côte d’Ivoire, Gambia, Sierra Leone, and the UK.

    GT Bank Ghana led the group with N118.96 billion, up 81 per cent YoY. All subsidiaries were profitable except GT Bank Tanzania, which posted a pre-tax loss of N1.1 billion, up from N26 million in 2023. Foreign subsidiaries contributed N273 billion to GTCO Group’s N1.266 trillion pre-tax profit in 2024, while GTCO Nigeria accounted for N1.003 trillion.

    In addition, the Group’s non-banking businesses including Habari Pay Ltd, Asset Management, and Pension Fund operations saw their combined contribution rise significantly to N14.59 billion in 2024, up from N5.96 billion in 2023. Despite the growth in foreign and non-banking contributions, GTCO Nigeria still accounts for over 79 per cent of the Group’s total profit, underscoring its dominant role in overall performance.

    In the same vein, Access Holdings’ 15 offshore subsidiaries generated N459.99 billion in pre-tax profit in 2024, representing a 131 per cent year-on-year (YoY) increase. This accounted for 53 per cent of the Group’s adjusted pre-tax profit of N867.02 billion, a significant rise from the 27.32 per cent contribution in 2023.

    The standout performer was Access Bank UK, contributing N259.1 billion, more than half of the total. However, the group also recorded losses from three subsidiaries South Africa, Mozambique, and Kenya.

    On the revenue side, Access Holdings recorded N4.878 trillion in gross earnings for 2024, with its foreign operations contributing N1.1 trillion, highlighting the growing significance of its international footprint.

    UBA, with operations in 20 African countries and the UK, led its peers in 2024 by generating N556.36 billion in pre-tax profit from its foreign operations. This accounted for 69.22 per cent of the group’s adjusted pre-tax profit of N803.73 billion, following group-level eliminations and consolidations. The 2024 contribution marks a significant jump from 29.69 per cent in 2023, highlighting the growing strength of UBA’s offshore operations Notably, this figure exceeds the N486.53 billion generated by UBA Nigeria meaning the subsidiaries outperformed the domestic arm.

    Among the subsidiaries, UBA Cameroon (N96.63 billion) and UBA Côte d’Ivoire (N57.24 billion) led profit contributions. Only UBA Kenya and UBA Tanzania posted pre-tax losses. Impairment losses across UBA’s foreign subsidiaries declined 64.27per cent YoY to about N53 billion, with UBA Ghana accounting for the highest impairment at N24 billion. Meanwhile, operating revenue of the foreign subsidiaries rose 106 per cent YoY to N1.577 trillion.

    The growing profitability of foreign subsidiaries highlights the success of Nigerian banks’ regional expansion strategies. These offshore operations provide vital revenue diversification and a hedge against domestic volatility.

  • Banks scramble for private investors’ cash

    Banks scramble for private investors’ cash

    • Fidelity Bank, Access Holdings, UBA lead N75.4b retail shares’ deals

    Banks are looking up to institutional and high net worth individual private investors to boost their capital base as bankers make concerted efforts to retain their standalone status.

    Investment banking sources yesterday said there have been a surge in discussions around private placements, with bankers and their professional advisers opting for pre-arranged deals with investors.

    Sources said banks were seeking out foreign and domestic investors with capacity for “material” equity stakes in order to shorten their capital raising programmes. Material shareholding, in Nigerian capital market parlance, implies a minimum investment of up to five per cent.  

    Trading report at the Nigerian stock market at the weekend also showed that retail investors were showing stronger appetite for banking stocks.

    The trio of Fidelity Bank Plc, Access Holdings Plc and United Bank for Africa (UBA) were the most active stocks at the Nigerian Exchange (NGX), accounting for 32 per cent of total turnover volume for the week.

    The three most active stocks accounted for 704.639 million shares worth N16.76 billion in 10,466 deals, representing 32.03 per cent and 22.22 per cent of the total equity turnover volume and value respectively.

    Total turnover for the four-day trading week stood at 2.20 billion shares worth N75.41 billion in 70,329 deals, a substantial increase on a total of 1.85 billion shares valued at N56.03 billion traded in 51,386 deals two weeks ago.

    The banking stocks-led financial services sector expectedly topped the activity chart with 1.43 billion shares valued at N30.91 billion in 33,095 deals; representing 65.09 per cent and 41 per cent of the total equity turnover volume and value respectively.

    Barely one-tenth of Nigerian banks have met the new minimum capital requirements for their licenses under a new definition of qualified capital by the Central Bank of Nigeria (CBN). Banks have up till March 31, 2026 to beef up their minimum capital base to the new standard set by the apex bank.

    While banks had mostly turned to existing shareholders in the early phase of the capital raising exercise, banks were said to be looking more to structured shares sales and selective offerings, driven by mutual bargains than predetermined terms of public issuances.

    A chief executive of bank, in a selective briefing for investment analysts, said the bank would combine private placement with other options to retain its international banking license.

    Another commercial bank with national authorisation is sourcing at least N50 billion from private placement to pre-arranged investor, in addition to capital raising from existing shareholders.

    A wholesale bank with a long history of capital market activities is sourcing funds from high networth businessmen with offer of board positions for material shareholdings.

    Market sources said they expected an uptick in the recapitalisation activities in the early second half.

    Experts said the recourse to private investors were expected given the timeline, the peculiarities of some banks and the quantum of funds required to meet the new minimum capital requirements.

    Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said banks were heading towards private investors because of inherent benefits in such strategic deals.

    “Selling to private investors brings lot of benefits. Not only is it likely to attract better valuation for the banks’ shares, but these private investors also bring some strategic advantages in terms of expertise, knowledge and even in some cases, technology transfer, that could be of added advantages to the banks, in addition to the capital they bring. I guess that’s why most banks are headed in that direction,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.

    Managing Director, AIICO Capital, Dr Femi Ademola, said the early successes of the recapitalisation plans might be a contributing factor to the push towards private placements.

    “Most of the banks that have raised funds so far recorded over-subscriptions and had to refund excess monies to investors while not raising enough to meet the capital requirement. So for those, it is easier to go after those that they refunded the monies back to and take the funds back through a less complex private placement arrangement.

    “Private placement is preferred in most times because it is less complicated in terms of required approval process and it’s far less expensive. The only thing is that, the banks are limited in the amount that can be raised through private placing, the number of people to take onboard and the length of time that the offer should be opened for. Hence, it is usually required that you have already identified the targeted investors before seeking regulatory approval to proceed with the private placing,” Ademola, a Chartered Financial Analyst (CFA), said.

    He noted that banks had carefully calibrated their recapitalisation plans to include several options including capital raise through public offering, rights issue and private placement; and merger and acquisition.

    Managing Director, Highcap Securities, Mr David Adonri, said unlisted banks might tend towards private placement because they couldn’t easily access the public offering market like publicly quoted banks.

    More than half of Nigerian banks seeking recapitalisation are either private limited liability companies.

    “Accessing capital through the capital market is the main benefit that companies enjoy when they are publicly quoted. This privilege is not extended to unlisted companies hence, the remaining unlisted banks are seeking to comply with the recapitalisation policy through private placement,” Adonri said.

    Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds.

    While most banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition.

    A review of financial results of quoted banks at the Nigerian Exchange (NGX) indicated that most banks still fall short of the new minimum capital base.

    The CBN had in March 2024 released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion.

    Read Also: Banks raise SMS alert charges by 50%

     Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026.  

    Under the guidelines for the recapitalisation exercise, banks are expected to subject their new equity funds for capital verification, before the clearance of the allotment proposal and release of the funds to the bank for onward completion of the offer process and addition of the new capital to its capital base.

    The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation exercise.

  • A familiar paradox

    A familiar paradox

    • Banks’ superlative profits serve the economy better where these reflect on the larger society

    It is a kind of paradox of which Nigerians are only too familiar: Of banks posting superlative figures of performance even when all that the ordinary citizen can see and feel is an

    economy that is, at best, still stuttering. The season, an inescapable part of the banks’ end of year offerings, is again set upon us as the banks reel out the figures of performance in the past year. As would be expected, newspapers have since focused on last year’s performance of the five tier 1 banks – all of which, between them, control not less than two-thirds of the industry and so are euphemistically regarded as systemically important.

     From their books have come the finding that their combined pre-tax profit have risen by about 70 per cent to N4.56 trillion just as their net profits after tax also surged by 66.2 per cent as at December 31, 2024. Their total assets during the period is also said to have risen to N108.21 trillion compared with N72.80 trillion in the preceding year. These – and this is remarkable – were said to have been driven by operational growth, rather than the usual extraordinary items such as foreign exchange (forex) revaluation gains as was the case in Y2023.

    Interestingly, the Central Bank of Nigeria (CBN) has a similar story of stewardship to tell. This time, it is about the country’s Net Foreign Exchange Reserve (NFER) position. According to the apex bank, the NFER, at the end of 2024 stood at $23.11 billion – the highest level in over three years. This is said to be a marked increase from $3.99 billion at year-end 2023, $8.19 billion in 2022, and $14.59 billion in 2021. Not only that, the gross external reserves also increased to $40.19 billion, compared to $33.22 billion at the close of 2023. The increase, it says, reflects a combination of strategic measures undertaken by it, including a deliberate and substantial reduction in short-term foreign exchange liabilities – notably swaps and forward obligations.

    Read Also: Troops arrest 43 oil thieves, seize 254,000 litres of stolen products in Niger Delta

    To the extent that these developments symbolise hope for the economy, Nigerians have reasons to rejoice in them. For the CBN in particular, we acknowledge what is, increasingly, a refreshing bust of fresh air after the trauma of the opacity and reckless abuses that characterised the deployment of the monetary policy tools under the immediate past regime. Then of course are the overall financial system stability and the measured wave of recapitalisation, both of which can only bode well for the ambitious targeted growth of $1 trillion by 2030 set by President Bola Tinubu.

    Yet, despite these, Nigerians could not be accused of being unreasonably insistent about what these actually come to in real terms, particularly at the micro and the macro levels of purchasing power, inclusive growth as indeed the fundamentals of economic diversification. For, just as a number of the worries daily expressed by Nigerians might be deemed as traditional, they have remained largely unanswered. We refer here to the daily frustrations with the wave of charges and the ruthlessness with which they are levied on customer accounts by banks, the age-long restrictions right up to the prohibitive costs of credit and even access by individuals and businesses, big or small. To the extent that the answers to how these bode well for the goal of financial inclusion have remained somewhat elusive, it is about time the economic management team sat together to address them holistically and realistically. After all, the idea of banks serving as an oasis of prosperity even when the larger economy remains enfeebled can only be a misnomer; if anything, the expectation is that the prosperity of an enabler, which is what the banks truly are, should translate to the prosperity of the enabled as indeed the overall society. Time, in our view, to focus on the goal of a more inclusive growth. 

  • Banks fail financial report deadline

    Banks fail financial report deadline

    Nigeria’s major banks failed to meet the February month-end deadline for submission of their audited financial reports, as the Central Bank of Nigeria (CBN) examines banks’ results to ensure they comply with extant best practices and rules.

    Most tier 1 banks, which control more than 75 per cent of Nigeria’s banking sector, were scheduled to submit their full-year audited report and accounts for the 2024 business year to the Nigerian Exchange (NGX) for onward release to the investing public at the weekend.

    The major banks, including Guaranty Trust Holding Company, Zenith Bank, Access Holdings, United Bank for Africa (UBA) and Stanbic IBTC Holding Plc, however failed to meet the submission deadline.

    The banks attributed their inability to meet the deadline to ongoing review of their financial statements by their primary regulator, the CBN, expressing concerns that they envisaged a possible delay due to the CBN’s audit approval process.

    Under the three-step final process for the release of audited reports and dividend recommendations for banks, the board of directors meets to consider and approve the audited financial statements as well as dividend recommendation, then authorises the transmission of the signed reports to the CBN, and with the receipt of the approval of the apex bank, transmits the audited report and dividend recommendation to the Securities and Exchange Commission (SEC) and the Nigerian Exchange (NGX) for announcement to the investing public.

    All the major banks confirmed that they have completed their board approval process and transmitted their results to the CBN. 

    The delay of the results sparked off selloffs in the banking sector as investors who had anticipated the release of the banks’ results adjusted their positions.

    The NGX Banking Index has headlined losses at the Nigerian stock market in recent days, fuelling a contagious bearish market that has seen the equities’ market average year-to-date dropping from 4.76 per cent to 3.9 per cent in two days.

    The highly influential banking sector index declined by 1.8 per cent yesterday, the highest by any sectoral index and nearly four times the size of average loss for the overall market. The All Share Index (ASI)- the value-based common index that tracks all share prices at the NGX dropped by 0.5 per cent yesterday. The NGX Banking Index had also suffered the highest loss of 1.2 per cent on Monday.

    Read Also: CBN orders banks to follow global standards to combat illicit $3 Trillion funds flow 

    Market analysts said the overall negative position at the stock market was connected to the banking sector.

    Managing Director, HighCap Securities, Mr. David Adonri, said the situation in the banking sector appeared to be having contagious effect on the overall market.

    “In terms of volume and value of trades, banks set the direction for the Nigerian capital market,” Adonri, a senior stockbroker, said.

    Analysts at Cordros Capital said the banking sector weighed on the overall market.

    Post-listing rules at the NGX require quoted companies to submit interim or unaudited quarterly report not later than 30 calendar days after the end of the relevant period. Such companies are also required to submit their audited full-year results not later than 90 days.

    However, where a company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter.

    These imply that companies that choose to audit their fourth quarter results are required to submit not later than 60 days after the end of the year. All the major banks fall under this category.

    Other banks, including First Holdco, Jaiz Bank, FCMB and Sterling Bank that opted for submission of unaudited interim reports for fourth quarter have up till March 31, 2025 for the submission of their full-year audited report and accounts.    

    Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year.

    The NGX tags and applies fines on companies that fail to meet earnings reports’ deadline. Companies that fail to meet the deadline will be tagged with poor corporate governance codes and are liable for sanctions that may range from N100,000 to about N100 million. The NGX is also empowered to suspend trading on the shares of chronic defaulters.

    However, the NGX can grant a general waiver and extension due to special consideration such as national crisis, extended holiday and industrial crisis. Also, the NGX can give specific waiver to a company based on the strength of reasons in its application for waiver.

    Many banks stated that they have secured regulatory extension that allows them to submit their reports after the deadline.

  • Banks target N2tr fresh capital in Q2

    Banks target N2tr fresh capital in Q2

    Nigerian banks are seeking to raise nearly N2 trillion in a new round of capital raising as the banking sector’s recapitalisation heads into its final year.

    The fresh capital raising is expected to cluster in the second quarter with offers from new issuers and previous issuers seeking to close their recapitalisation gaps.

    Investment banking and regulatory sources yesterday said there were not less than seven banks that have advanced in their capital raising processes.

    The banks include Wema Bank Plc, Fidelity Bank Plc, Guaranty Trust Holding Company (GTCO), FCMB Group, Abbey Mortgage Bank Plc, FBN Holdco and Greenwich Merchant Bank among others.

    The banks are expected to explore both public issuance and private placements, with more banks seeking strategic private investors to augment their capital base.

    Only three banks have so far met the new minimum capital requirements for their banking licences, under the new distinctive definition of qualified capital by the Central Bank of Nigeria (CBN).

    The banking sector dominated the capital raising chart in 2024, conclusively raising about N1.23 trillion at the start of the two-year recapitalisation exercise in 2024.

    Banks are expected to ride on the back of sustained investors’ appetite to meet their targets. Banking sector stocks are the highest-yielding at the stock exchange, with average return almost a double of the market’s return.

    Average year-to-date return for the Nigerian equities stands at 5.41 per cent, less than half of banking sector’s 10.90 per cent.

    Wema Bank, which had raised about N40 billion through share issuance to existing shareholders, is returning to the capital market to raise new equity capital through a combination of share issuance to existing shareholders and new private investors.

    Fidelity Bank, which had recorded massive oversubscriptions to its initial rights and public offers in 2024, earlier this month received shareholders’ approval to issue 20 billion ordinary shares under a fresh recapitalisation drive that could see the bank raising some N300 billion.

    Fidelity Bank is believed to be considering strategic private investors in its bid to retain its N500 billion international banking licence.

    FCMB Group, which had raised N147.5 billion in 2024 to successfully scale its minimum capital base above the national banking licence threshold at N240 billion, is concluding arrangements for next phases of its recapitalisation.

    Read Also: IMF: banks’ profit not hurt by inflation, rate hike

    FCMB still needs N260 billion additional equity funds to meet the N500 billion requirement for its international banking license.

    Also, Guaranty Trust Holding Company (GTCO) Plc, which raised N209 billion out of its initial target of N400.5 billion, has also indicated plan to return to the market for the additional funds to retain its international banking license.

    Shareholders of Abbey Mortgage Bank have approved new capital raising for the mortgage bank seeking to convert into a regional commercial bank.

    The CBN had in March 2024 released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion.

     Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026. 

    Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds. While several banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition.

    Fitch Ratings recently reported that banks were making significant progress in raising capital to meet new capital requirements.

    The global rating agency noted the initial success of the banks’ offers in 2024, which momentum it said has reduced the likelihood of significant banking sector consolidation.

    Fitch stated that strong investor appetite has ensured that the vast majority of capital raisings so far have been successful, and most first- and second-tier banks should be able to meet their new capital requirements through capital raisings alone.

    Fitch analysts believe the likelihood of banking sector consolidation among first- and second-tier banks has decreased.

    According to Fitch, the capital raisings are contributing to a recovery in capitalisation from the impact of naira devaluation, which put pressure on capital ratios and increased dollar credit concentration risks.

    Strengthened buffers over minimum capital adequacy ratio requirements will mitigate risks from a challenging operating environment, including regulatory intervention and further naira volatility, while providing room for business growth.

  • Banks, telcos customers moan over high service charges

    Banks, telcos customers moan over high service charges

    Commercial banks are riding on telco platforms to rake in billions of naira from the increasing number of customers using digital banking services.  

    Most of the banks deploy several strategies, products and services under which they charge fees, far above what is specified in the guide to bank charges.

    Banks charge electronic money transfer fees,  annual debit card maintenance fees; N105 online transfer charge for every online transfer and three to five per cent processing fee for cash withdrawals above the cash-less banking limit.

    Others include text message fees; processing, management and draw-down fees for loan accounts   

     Nearly all the 70 million bank customers across the country have one complaint or the other against their banks. They are also speaking out through different platforms, including social media.

    There has also been an increase in failed transactions for customers using e-payment services to buy airtime or data. Many customers complain that they are debited for data and airtime purchases without receiving the commodities/services.

    In the past,  complaints over excessive bank charges reached new heights when the Consumer Advocacy Foundation of Nigeria (CAFON) – a not-for-profit organisation, declared March 1 as No Banking Day.

    On No Banking Day, banks’ customers speak in one voice against outrageous charges and poor customer service being rendered to them.

     Bank customers were urged not to use Automated Teller Machine (ATM) cards, log in to any online banking portal, transfer money through their phones, tablets, or laptops, make Point of Sale (PoS) payments, online payments, issue or present any cheque throughout that day.

    Read Also: IMF: banks’ profit not hurt by inflation, rate hike

    Industry statistics showed that more than 700,000 customers lodged arbitrary charges complaints against their lenders in the last six months.

    Adenike Abiola, a mobile phone subscriber, told The Nation at the weekend that she bought N2,000 airtime using her mobile banking app, but the airtime was never credited to her account after it was debited.

      “The Telco and bank have been tossing me around. No one wants to take responsibility for the transaction. The bank says it was successful and the telco says they never got the money,” she narrated.

    According to her,  no reversal   has  been  despite    several visits   to the bank and calls to the  telco  

    Writing on his Facebook page, a bank customer, Michael Adetayo, accused his lender of charging him N1,800 a dollar after he made an online purchase worth $190.96. That, according to him,   translates to N342,000, instead of N285,000 based on the N1,500 to the dollar exchange rate at the official market.

    Adetayo said: “It’s a debit card, not a credit card. So, the rate on the day of purchase should apply. After all, if the rate had been N1,800 to the dollar yesterday, my buying decision could have been way different or I could have used a different payment platform.”

    Maureen Akaeze said she had a similar experience when she bought a product from an online store, Amazon, using her debit card.  Akaeze said the deduction in naira was double the price tag of the product.

     She added that some banks now charge $10 for every withdrawal from a customer’s domiciliary account.

    Another angry customer, Yvonne Imafidon-Agarana, said: “It happened to me also. I was charged over N1,820 per dollar by one bank and when I switched to another bank’s debit card, the rate dropped to N1,801 per dollar.”

    Ignatius Abiola also complained.

     His words: “I completely corroborate this story. That’s exactly what they have done to me. I made a transaction on the 30th of December, 2024, to a foreign airline with my debit card and they charged me way above the black market rate for the same reasons.

     ‘’Last week, I also used my debit card and I had to call home to ask what was actually happening because the exchange rate from naira to dollar was alarming. They charged me N1,804 to dollar.”

    Analysts said the banks are hedging debit card transactions by keeping funds above the transaction figure in anticipation of an exchange rate increase but fear the funds are never returned to customers.

    For Onyeka Okorie, a customer of a new generation bank, everything had gone well until the day he demanded the balance of his account when he wanted to transfer N1 million to a business associate.

    “I am talking about my corporate account balance, not savings. That cannot be the balance because I made a cash deposit of N500,000 to the account two days ago,” he told the customer service officer, who for the second time, crosschecked and confirmed the account balance.

    Okafor was wrong. It was the right account except that the balance had been reduced by N40,000 after the lender took all ‘outstanding fees.’