Banking
Nigerian Banks Must Recapitalise to Revive Economy—IMF
By Modupe Gbadeyanka
The need for deposit money banks (DMBs) operating in Nigeria to raise fresh funds to boost their capital adequacy ratios (CARs) otherwise known as capital base, has been emphasised by the International Monetary Fund (IMF).
Speaking at a function in Lagos over the weekend, IMF’s Mission Chief for Nigeria, African Department, Mr Amine Mati, explained that the recapitalisation was needed to ensure the aim of the Economic Recovery and Growth Plan (ERGP) formulated by the present administration of President Muhammadu Buhari was met.
The ERGP, a Medium Term Plan for 2017 to 2020, was designed by the Federal Government and launched some months ago to jumpstart the economy.
The last recapitalisation in banking sector in Nigeria happened in 2005 and the Central Bank of Nigeria (CBN) then raised the minimum capital base from N2 billion to N25 billion, leaving some banks to merge and other undercapitalised banks acquired by bigger lenders.
After the exercise, the number of banks in Nigeria reduced to 25 from 89.
At the moment, there are 21 commercial banks, four merchant banks and one non-interest bank.
In Nigeria, the central bank pegged the capital adequacy ratio for banks at 15 percent, though most banks
The Central Bank of Nigeria (CBN) has continued to advise banks to double provisions on performing loans to two percent to build adequate buffers against unexpected losses, as liquidity ratios fall. Besides, lower revenues for government and oil companies due to plunging crude prices have led to unsecured exposures for banks that are likely to increase credit risk and loan losses. The level of non-performing loans has risen to nearly 15 per cent against five per cent regulatory threshold and lenders need new capital to maintain sound capital adequacy ratio.
Speaking at the 2017 Chartered Institute of Bankers of Nigeria (CIBN) Investiture, Mr Mati said lenders in the country should seek fresh capital from the Eurobond market.
This, Business Post reports, some banks are already doing.
In May 2017, Zenith Bank Plc expressed its intention to issue about $500 million Eurobond in the second tranche of the $1 billion Global Medium Term Note programme it launched in 2014.
In the first tranche of the exercise, the financial institution’s $500 million Eurobond was oversubscribed by investors mainly from Nigeria, the United States, the United Kingdom and the European Union.
Zenith Bank then explained that it, “Intends to utilize the net proceeds of the Second Tranche Notes for its general banking purposes.”
“The net proceeds from the issue of the Second Tranche Notes will be paid into the Bank’s foreign currency domiciliary account and may be converted into Naira or retained in foreign currency,” it said further.
In June 2017, the $500 million Eurobond launched by United Bank for Africa (UBA) Plc in May 2017 was oversubscribed by investors from the United Kingdom, Europe, Asia, the Middle East and the United States, Business Post can report.
It was gathered that exercise was 240 percent oversubscribed, reflecting the strong demand for UBA’s credit and support for its pan-African financial services strategy by global investors.
This month, Fitch Ratings described the issuance of Eurobonds by Nigerian banks as a step towards reducing maturity mismatches between foreign-currency (FC) assets and liabilities.
The global rating firm said the return of Nigerian banks to the international bond markets lessens FC liquidity risk, but the impact will be modest as the new bond issuances are small relative to total term FC lending.
By Adedapo Adesanya
The Bank of Industry (BoI) has secured regulatory approval from the Central Bank of Nigeria (CBN) to offer Non-Interest Banking (NIB) services, marking a major expansion of its financing framework.
The approval was disclosed in a statement by the BoI Managing Director, Mr Olasupo Olusi, on Sunday, February 8, 2026.
The move is expected to strengthen the bank’s role in promoting sustainable industrial development and improving access to finance for underserved and high-impact business segments across Nigeria.
With the approval, BoI is authorised to commence non-interest banking operations, providing ethical, asset-backed financing options that prohibit interest and promote risk-sharing.
The initiative aligns with growing demand for alternative financing structures that support inclusive growth and social development objectives.
Mr Olusi described the approval as a significant milestone in the bank’s growth and long-term development agenda, adding that it positions BoI to deepen its contribution to Nigeria’s industrialisation drive through tailored financial solutions.
“This development marks a significant milestone in the Bank of Industry’s growth and long-term development agenda,” Olusi said.
“It positions the bank to further advance Nigeria’s sustainable and inclusive industrial development through tailored financial solutions for underserved and high-impact business segments.”
“Under this framework, BoI will be able to finance assets and raw materials for customers using approved non-interest banking products,” he added.
Mr Olusi noted that the approval underscores the CBN’s confidence in BoI’s governance and commitment to responsible financing.
He said the licence would allow the bank to scale its operations, introduce innovative financing solutions, deepen support for Micro, Small and Medium Enterprises (MSMEs), and reach a new category of borrowers who were previously unable to access BoI’s funding.
Reconstructed in 2001 from the former Nigerian Industrial Development Bank (NIDB) Limited, BoI was originally incorporated in 1959 to transform the country’s industrial sector by providing long-term, low-interest financing and advisory support to various enterprises.
The introduction of a non-interest banking window is expected to broaden BoI’s financing toolkit and attract new pools of ethical and faith-based capital.
By Modupe Gbadeyanka
The Group Chief Economist and Managing Director for Research and Trade Intelligence at the African Export-Import Bank (Afreximbank), Mr Yemi Kale, has been pencilled down to deliver the keynote address at the second Ecobank Customer Forum.
The programme, themed Strengthening Regional Integration for Economic Transformation, will take place at the Ecobank Pan-African Centre (EPAC) in Lagos.
The forum, organised by the bank’s Fixed Income, Currencies and Commodities (FICC) Business (Treasury), is designed to examine critical issues shaping Nigeria’s and Africa’s economic outlook in 2026, with particular focus on trade, financial markets, foreign exchange liquidity and regional integration, especially as the African Continental Free Trade Area (AfCFTA) agreement enters a strategic phase of implementation.
The Regional Treasurer for Ecobank Nigeria Limited, Mr Olumide Adebayo, said the one-day programme reinforces the lender’s role as a trusted financial partner and customer-focused institution, with the intention to foster dialogue, support informed decision-making, and deeper regional economic integration across Africa.
According to him, the seminar will open with welcome remarks by the Managing Director/Regional Executive of Ecobank Nigeria, Mr Bolaji Lawal, who will underscore the bank’s commitment to supporting customers and driving inclusive growth through strategic dialogue, innovation and pan-African collaboration.
The keynote address, titled The Future of Trade in Africa: Harnessing the AfCFTA for Economic Transformation, will be delivered by Mr Kale and will provide insights into Africa’s trade prospects and the transformative potential of the AfCFTA.
The forum will feature two high-level panel discussions: Balancing the Risk between Interest Rate and Exchange Rate: Business Expectations and Outlook in 2026, and Export Proceeds, Oil Receipts and Remittances in 2026: Exploring Options that Best Support FX Liquidity and Flows in Nigeria.
The event would be moderated by Messrs. Aruoture Oddiri, Host and Producer of Global Business Report on Arise News and Barnabas Vajeh of Ecobank Nigeria Limited.
By Aduragbemi Omiyale
The 2025 full-year interim financial statements of Sterling Financial Holdings Company Plc released to the Nigerian Exchange (NGX) Limited revealed that pre-tax profit increased by 99 per cent to N90.7 billion.
The parent company of The Alternative Bank and Sterling Bank showcased an improvement in operational efficiency by cutting its cost-to-income ratio to 63 per cent from 72 per cent in 2024.
In the period under review, the gross earnings grew by 46 per cent to N476.5 billion, driven by healthy growth in both interest and non-interest income, with the former up by 43 per cent to N369.6 billion, fueled by an increase in loans and advances and improved yields on investment securities.
Also, the non-interest income expanded by 57.3 per cent, supported by higher trading income and growth in fees and commissions.
As for the balance sheet, it was robust as total assets surged by 11 per cent to nearly N4 trillion, a strong indicator of its expanded market footprint, with customer deposits rising by 18 per cent to N2.98 trillion, further reflecting the organisation’s successful efforts in enhancing customer engagement and product adoption across its platforms.
Sterling Holdco has also continued to strengthen its capital position, with shareholders’ funds increasing 39 per cent to N424.0 billion.
This bolstered capital base ensures the group’s banking subsidiaries are well-equipped to support its future growth initiatives, having met the recapitalisation requirements of the Central Bank of Nigeria (CBN) ahead of the March 2026 deadline.
This achievement was driven by a series of disciplined capital-raising initiatives, including a public offer of over N88 billion to bolster Sterling Bank’s position, and a prior capital injection that secured The Alternative Bank’s status as a national non-interest bank.
The results reflect a diversified earnings base, an emphasis on efficient capital deployment, and a strengthened operational foundation, all of which position Sterling Holdco for continued growth in the competitive financial services landscape.
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