Banking
Nigeria’s Banking Woes: How One South African Bank Outvalues an Entire Industry
By Blaise Udunze
It is a sobering reality that one South African bank, Standard Bank Group, has a market capitalisation of roughly ZAR 384.34 billion (about $21-22 billion), while the entire Nigerian banking sector combined cannot match it. For a nation of more than 200 million people, with an economy that should be the beating heart of Africa, the fact that a single Johannesburg-based bank can outweigh the collective worth of Nigeria’s 33 licensed banks is more than embarrassing; it is scandalous.
This disparity is not just about prestige. It is about the fundamental ability of Nigeria’s banking system to mobilise capital, finance development, and command investor trust. The comparison with South Africa, a country with less than one-third of Nigeria’s population and a smaller GDP in nominal terms, lays bare the structural weaknesses that have crippled Nigerian banks for decades.
As of May 2025, Nigerian banks listed on the Nigerian Exchange (NGX) had a combined market capitalisation of about N10.5 trillion. In dollar terms, depending on the exchange rate benchmark, this amounts to less than $8 billion. That is the total value investors are willing to place on the entire Nigerian banking system. By contrast, South Africa’s top six banks together are valued at more than $70 billion. Individually, Standard Bank alone commands a market cap of around $21.8 billion, while FirstRand hovers at about $20.5 billion. Absa, Nedbank, and Investec all sit comfortably in the multi-billion-dollar bracket. In Nigeria, the biggest player, GTCO, is valued at less than $2 billion, barely a fraction of its South African peers. Access Holdings, despite boasting assets above N32 trillion ($71 billion), trades at a market cap of just about $710 million. The disconnect between asset size and market value speaks volumes about investor distrust, weak governance, and systemic fragility.
The paradox of Nigeria’s banking industry is that on paper it appears profitable, yet in reality it is fragile. In 2024, the top five lenders declared after-tax profits that surged more than 270 percent year-on-year. But by the first quarter of 2025, that growth had evaporated, slowing to a meager 0.74 percent. The supposed windfall profits were largely a mirage created by the naira’s freefall, which inflated the value of foreign currency holdings on paper. These were not profits born of efficiency, innovation, or stronger lending; they were accounting artifacts. The Central Bank of Nigeria (CBN), seeing the danger, stepped in to block banks from paying out these revaluation gains as dividends, insisting they be held as buffers against future shocks. That intervention exposed the hollowness of the profit’s narrative.
The recapitalisation push is the clearest sign yet of the sector’s fragility. With six months to the March 31, 2026, deadline, the CBN has confirmed that fourteen banks have so far scaled the recapitalisation hurdle. The governor of the CBN, Olayemi Cardoso, disclosed this on Tuesday, September 23, 2025, during the Monetary Policy Committee (MPC) meeting in Abuja. That leaves nearly 19 banks still scrambling to raise funds in a market already skeptical of their true value.
If Nigeria’s banks were genuinely as profitable and resilient as they claimed, they would not be racing to the capital markets, scrambling for fresh equity to meet the CBN’s new recapitalisation thresholds: N500 billion for international banks, N200 billion for national banks, and N50 billion for regional players. The contradiction is stark, record profits on one hand, desperate fundraising on the other.
The currency crisis further underscores the fragility of Nigeria’s financial system. According to the Forbes currency calculator report for September 2025, the naira has been ranked as the ninth weakest currency in Africa, trading at about N1,487 to the dollar. The ranking, based on real-time foreign exchange market data, captures how demand and supply, investor sentiment, and broader economic conditions have battered Nigeria’s exchange rate. On the continent, only currencies like the São Tomé & Príncipe Dobra, Sierra Leonean Leone, Guinean Franc, and a handful of others fare worse. By contrast, the Tunisian Dinar, Libyan Dinar, Moroccan Dirham, Ghanaian Cedi, and Botswanan Pula sit at the top as Africa’s strongest currencies. For Nigeria, the supposed giant of Africa, such a lowly placement is telling. It is not just a technical matter of exchange rates; it is a reflection of waning investor confidence, policy inconsistency, and the erosion of the naira’s credibility. And this credibility gap feeds directly into why Nigerian banks are so poorly valued compared to their peers.
This is not the first time Nigerian banks have faced such a reckoning. In 2004-2005, then CBN Governor Charles Soludo spearheaded a bold consolidation exercise that shook the industry to its foundations. At the time, Nigeria had eighty-nine banks, most of them undercapitalised, fragile, and unable to finance large-scale projects. Soludo raised the minimum capital base from N2 billion to N25 billion, forcing mergers and acquisitions that reduced the number of banks to 25 by 2005. The exercise created bigger, more competitive players like Zenith, GTBank, Access, and UBA, which for a time stood tall on the continental stage. Nigerian banks expanded across Africa, rode the wave of oil-driven economic growth, and built reputations as ambitious challengers to South African dominance.
But the momentum did not last. The global financial crisis of 2008, compounded by oil price volatility and weak regulatory oversight, exposed vulnerabilities. Many banks were overexposed to the stock market and the oil sector. By 2009, a new CBN governor, Sanusi Lamido Sanusi, had to intervene with another round of reforms, including emergency bailouts, leadership changes, and tighter risk management rules. While those measures stabilised the sector, they also clipped its wings, pushing banks towards conservatism rather than innovation. Over the next decade, as South African banks deepened their continental footprint and attracted global investors, Nigerian banks retreated into a survival mode, relying more on government securities, forex arbitrage, and fee-based income than on transformative lending.
Today, the consequences are clear. Investors are not rewarding Nigerian banks with higher valuations because they see deeper issues: weak governance, currency instability, short-termism, and a preference for rent-seeking over risk-taking. Access Bank, with assets of over $71 billion, is valued by the market at less than $1 billion, which is an absurd disparity that reflects not just naira devaluation but also a crisis of confidence. Meanwhile, Standard Bank and FirstRand are rewarded with valuations in the tens of billions because they have built reputations for governance, stability, and consistent growth, even in a difficult South African economy.
The implications of this disparity go far beyond balance sheets. Banking is the lifeblood of any economy. Without robust, well-capitalised banks, Nigeria cannot fund the infrastructure, industrialisation, and job creation it desperately needs. Instead of driving development, banks have become rent-seekers, charging high fees, exploiting exchange rate gaps, and surviving on government bond yields. This is not banking for growth; it is banking for survival. The danger is that Nigeria’s banking sector could become increasingly irrelevant on the continental stage. Already, pan-African conversations about finance, trade, and fintech leadership are dominated by South African, Kenyan, and Moroccan institutions. If Nigerian banks cannot scale up, innovate, and command investor trust, the country risks losing its voice in shaping Africa’s financial future.
Fixing Nigeria’s banking woes will require bold reforms, not half measures. Deep recapitalisation is essential, not just to meet regulatory minimums but to build genuine resilience. Governance must be overhauled to eliminate opacity, insider abuses, and regulatory capture. Banks must be compelled to shift their focus from government securities and currency speculation to financing manufacturing, SMEs, and infrastructure, which are the engines of real growth. Macroeconomic stability, especially currency and inflation control, is indispensable to restoring confidence. And if that means forcing consolidation once again, so be it. Nigeria does not need 33 weak banks; it needs fewer, stronger institutions that can compete with global peers.
Nigeria prides itself as the giant of Africa. But in banking, it is dwarfed by a smaller neighbour. That a single South African bank is worth more than the entire Nigerian banking system should serve as a blaring siren. It is a sign that the foundations of Nigeria’s financial architecture are weak, and without urgent reform, the gap will only widen. The lesson is clear: size of population or GDP counts for little if banks cannot mobilise and protect capital. Until Nigeria’s lenders transform from fragile, short-term operators into robust, trusted financial powerhouses, the humiliation will persist with one South African bank towering over an entire Nigerian industry.
Blaise, a journalist and PR professional writes from Lagos, can be reached via: bl***********@***il.com
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has said 33 banks have met new minimum capital requirements under its now-closed recapitalisation programme, raising a combined N4.65 trillion to strengthen the Nigerian financial system.
The apex bank disclosed this in a statement on Wednesday, marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Mrs Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Mrs Hakama Sidi-Ali.
“Over the 24 months, Nigerian banks raised a total of N4.65 trillion in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy,” the statement said.
The chief lender said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
According to the statement, the Governor of the apex bank, Mr Yemi Cardoso, said, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
The lender further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
The CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
By Modupe Gbadeyanka
The chairman of Access Bank Plc, Mrs Ifeyinwa Osime, has called for deliberate and strategic investment in women as a catalyst for sustainable economic growth.
According to her, empowering women should be seen as a strategic economic decision rather than charity.
“When we speak of giving, it is about expanding access to finance, markets, knowledge and platforms that enable women to build sustainable businesses,” she said at an International Women’s Day Conference organised by Access Bank.
At the event, which attracted over 5,000 participants both physically and virtually, and attended by stakeholders across the public and private sectors, she noted that women own about 39 per cent of businesses in Nigeria and drive nearly
40 per cent of new enterprises, while small and medium enterprises contribute about 48 per cent of Gross Domestic Product (GDP) and over 80 per cent of employment.
Mrs Osime, however, decried the persistent financing gap facing women, describing it as a major constraint on productivity and economic growth.
“No economy can optimise its potential while underinvesting in half of its population,” she said, highlighting the bank’s interventions through its W Initiative and Womenpreneur Pitch-a-ton programme, which provides financing, training and healthcare support to thousands of women.
Also speaking at the programme, the Minister of Art, Culture, Tourism and the Creative Economy, Ms Hannatu Musawa, reiterated the government’s commitment to empowering women as key drivers of the nation’s creative economy, with a focus on expanding access to finance, skills development and leadership opportunities.
The Minister, represented by the Director-General of the Centre for Black and African Arts and Civilisation (CBAAC), Mrs Aisha Adamu, said women were increasingly taking the lead in building businesses, driving innovation and shaping society.
“Across Nigeria, women have always been the invisible architects of our culture, yet their contributions have been underrepresented and undervalued,” she said.
The Minister said the ministry was repositioning culture as a structured economic sector through creative hubs, skills development and enterprise support programmes targeting women in film, fashion, digital media and tourism.
On financing, Ms Musawa noted that women-owned businesses account for about 40 per cent of small and medium enterprises but continue to face significant funding gaps.
“Too many ideas remain small not because they lack potential, but because they lack access to capital,” she said, adding that the government was working to unlock targeted funding for women, strengthen market access and improve data systems to support women entrepreneurs, while also promoting their inclusion in leadership and policy-making processes.
Also, former Minister of Education, Mrs Oby Ezekwesili, stressed the need to prioritise women’s inclusion in development processes, noting that societies transform when critical issues such as women’s inclusion are deliberately prioritised.
“There is no other way societies have transformed than when people who care make an issue a priority,” she said, stressing that removing structural barriers limiting women’s participation would unlock significant economic potential, adding that agricultural output could increase by up to 30 per cent if women had equal access to inputs as men.
In the same vein, the Group Head for Women Banking at Access Bank, Mrs Nene Kunle-Ogunlusi, said the bank remained committed to supporting women across all segments.
She said the bank recently organised a special Women’s Day programme for market women in Oyingbo, Lagos, offering free health checks, beauty services and financial education.
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has directed banks to complete a mandatory cybersecurity self-assessment within three weeks.
In a letter dated March 30, 2026, and published on its website on Tuesday, the apex bank said, “Institutions are required to submit their completed CSAT within the following timelines: i. Three (3) weeks – Deposit Money Banks (DMBs); ii. Five (5) weeks – All other regulated institutions.”
The directive, addressed to banks, selected other financial institutions, and payment service providers, introduced a Cybersecurity Self-Assessment Tool to evaluate the cyber risk exposure of regulated entities.
The CBN stated that the move was in line with its statutory mandate under the Banks and Other Financial Institutions Act 2020 and its broader commitment to improving cybersecurity standards in the sector.
“The Central Bank of Nigeria, in furtherance of its statutory mandate under the Banks and Other Financial Institutions Act (BOFIA) 2020 and consistent with its commitment to strengthening cybersecurity resilience across the financial sector, hereby notifies all Deposit Money Banks, Payment Service Banks, Microfinance Banks, Payment Service Providers, Finance Companies, and Development Finance Institutions of the deployment of its Cybersecurity Self-Assessment Tool,” the letter read.
The apex bank explained that the CSAT is designed as a supervisory instrument to provide a comprehensive view of financial institutions’ cybersecurity posture.
It explained that the tool would assess critical areas, including governance structures, risk management frameworks, technology systems, third-party risk exposure, incident response capacity, and overall operational resilience.
“The CSAT is a structured supervisory instrument designed to obtain comprehensive information on the cybersecurity posture of regulated institutions,” the CBN said.
The bank added that insights generated from the exercise would support risk-based supervision and enhance regulatory oversight of cybersecurity threats within Nigeria’s financial ecosystem.
Earlier in December 2025, banks in Nigeria were urged to strengthen their cybersecurity systems as rising digital fraud continued to erode customer trust and slow the growth of the country’s digital banking sector.
In the latest update, the CBN told banks to ensure compliance, adding that all affected institutions must complete and submit the assessment through a dedicated portal, with access credentials to be communicated to their Chief Information Security Officers and other relevant officials.
“All submissions must be fully completed and accompanied by relevant supporting documentation, where applicable,” it stated, noting that the data to be provided must reflect institutions’ positions as of December 31, 2025.
The CBN also issued a warning against false or incomplete disclosures, stressing that accuracy and transparency would be strictly enforced.
“Supervised institutions are reminded that all information submitted to the CBN must be accurate, complete, and verifiable. Submission of false, misleading, or inaccurate information constitutes a regulatory breach and will attract appropriate sanctions,” the letter added.
It also disclosed plans to validate submissions through off-site reviews and supervisory engagements to confirm the data’s reliability.
The directive, which takes immediate effect, signals tighter regulatory scrutiny of cyber risks in the banking sector amid rising digital transactions and increasing exposure to cyber threats.
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