The Central Bank of Nigeria (CBN) has cautioned that larger focus threat from the continued banking sector recapitalisation may set off investor fatigue and crowd-out different issuers within the capital market.
The warning was conveyed within the apex {bank}’s macroeconomic outlook for 2026.
The 2-year window given to Nigerian banks to adjust to the brand new capital threshold elapses in March.
The apex {bank} famous that this, mixed with rising non-performing loans, might weaken banks’ steadiness sheets and pose systemic dangers to the {financial} sector.
“Increased focus threat from the continued banking sector recapitalisation may set off investor fatigue and crowd-out different issuers. Collectively, these may derail the outlook for the {financial} sector,” the {Bank} said.
It added that “a big rise in non-performing loans may impair asset high quality, and weaken banks’ steadiness sheets, thereby posing systemic threat.”
Regardless of these dangers, the CBN reaffirmed its dedication to balancing worth stability with output development in 2026.
The {Bank} mentioned it could deploy applicable coverage devices to draw international funding and consolidate stability within the international alternate market.
The outlook additionally highlighted plans to deepen {financial} stability by strengthening the operational integration of the World Standing Instruction (GSI) framework throughout {financial} establishments, implementing credit score self-discipline, and tightening cybersecurity rules.
In keeping with the report, development in financial aggregates in 2026 is anticipated to be formed by alternate fee actions, fiscal operations, election-related spending, and continued implementation of prudential measures.
The CBN projected that the capital market would stay bullish, supported by the recapitalisation train, rising investor confidence, and different coverage measures aimed toward fostering development.
In March 2024, the CBN directed industrial banks with worldwide authorization to boost their capital base to N500 billion, whereas these with nationwide licenses should enhance theirs to N200 billion.
Banks got a two-year compliance window, with March 2026 set because the deadline.
The recapitalisation drive is anticipated to strengthen the resilience of Nigeria’s banking sector, however the CBN warned that the focus of investor exercise in {bank} recapitalisation may restrict funding alternatives for different issuers within the capital market.
In November, the CBN revealed that 16 banks have met its recapitalisation threshold, marking regular progress within the trade’s efforts to strengthen steadiness sheets and adjust to new regulatory necessities forward of the March 2026 deadline.
CBN Governor Olayemi Cardoso disclosed the event throughout a press briefing on the finish of the Financial Coverage Committee (MPC) assembly in Abuja.
The up to date determine displays an enchancment from the 14 banks that had met the minimal capital requirement as of the final MPC assembly in September, signalling what the {Bank} described as rising compliance throughout the sector.
