NEW signs have emerged that one of Nigeria’s oldest banking institutions, which is yet to meet the recapitalization requirements of the Central Bank of Nigeria (CBN), is currently attracting interest from strategic investors from at least three groups.
Market intelligence suggests that despite an outward appearance of regulatory calm, the CBN has been quietly reviewing competitive bids from local and foreign investors seeking major stakes in deposit money banks that have not met legal capital thresholds. Among them is a bank more than 100 years old that has become the focus of intense behind-the-scenes negotiations.
Sources familiar with the process revealed that a consortium from the Arabian Peninsula and another group with strong European banking connections have emerged as pioneers in the race for a strategic stake in the institution.
However, the process remains fluid, with no final decision made and negotiations still ongoing.
Analysts say the apex bank may be willing to favor a foreign investor acquiring a significant ownership position in the century-old lender, viewing such an outcome as a credibility boost for the ongoing recapitalization program.
The program, which aims to strengthen balance sheets and improve systemic stability, is scheduled to conclude on March 31, 2026.
According to proshare’s Economic and Market Intelligence Unit (EMIU), the CBN is also not opposed to mergers between relatively weaker banks, particularly those with negative or marginally positive shareholder funds. Analysts argue that such consolidation could lead to the emergence of larger, more resilient institutions with greater lending capacity.
“The challenge with some of the local interests that have expressed their intention is their limited ability to raise the minimum unencumbered capital required, while maintaining adequate working capital,” EMIU said. “This has raised concerns about the viability of purely internal solutions for some of the weaker banks.”
One proposal being considered in market circles is a partnership model in which foreign investors with deep pockets collaborate with local investors who possess political and market influence.
While this approach seems logical on the surface, industry observers say it faces significant technical, governance and regulatory hurdles that may ultimately limit its viability.
For banks listed on the Nigerian Stock Exchange, the results of recapitalization have so far been mixed. With about three months left before the deadline, most Tier 1 and Tier 2 banks have managed to raise the required capital reserves under the revised regulatory framework. However, several Tier 3 lenders remain under pressure, struggling to secure capital injections or strategic partnerships to avoid forced mergers or distressed acquisitions.
The CBN Governor, Mr Olayemi Cardoso, acknowledged this uneven progress at the Chartered Institute of Bankers of Nigeria (CIBN) annual bankers dinner last month. He said many banks had already met the new capital requirements, while others were making steady progress and were expected to comfortably meet them before the deadline.
According to the Governor, twenty-seven banks have raised capital through public offerings and rights issues, while sixteen institutions have already met or surpassed the new thresholds. He noted that this performance underlines the depth, resilience and adaptive capacity of Nigeria’s financial system, even amid prevailing macroeconomic headwinds.
As the recapitalization deadline approaches, attention is increasingly shifting to weaker lenders and the regulatory decisions that will shape their future, whether through strategic foreign investments, mergers or acquisitions that could redefine Nigeria’s banking landscape.