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 Modupe Gbadeyanka
To drive inclusive growth, strengthen financial stability, and deepen global financial integration across developing economies, there must be coordinated reforms in digital cross-border payments.
This was the submission of the Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, at the G‑24 Technical Group Meetings in Abuja on Thursday, February 19, 2026.
According to him, high remittance costs, settlement delays, fragmented systems, and heavy compliance burdens still limit the participation of households and Micro, Small and Medium Enterprises (MSMEs) in global trade.
The central banker emphasised that efficient payment systems are essential for economic inclusion, highlighting that global remittance corridors still incur average costs above 6 per cent, with settlement delays of several days, excluding millions from modern economic activity.
Mr Cardoso cautioned that while digital payments present significant opportunities, they also carry risks such as currency substitution, weakened monetary transmission, increased FX volatility, capital-flow pressures, and regulatory fragmentation.
The G-24 TGM 2026, themed Mobilising finance for sustainable, inclusive, and job-rich transformation, convened global financial stakeholders to advance the modernisation of finance in support of emerging and developing economies.
The CBN chief reaffirmed Nigeria’s commitment to working with G-24 members, the IMF, the World Bank Group, and other partners to build a more inclusive, resilient, and development-oriented global financial architecture.
“We have strengthened our AML/CFT frameworks in line with FATF guidelines, requiring strict dual-screening of cross-border transactions to mitigate risks.
“To deepen regional integration, the CBN introduced simplified KYC/AML requirements for low-value cross-border transactions to encourage broader participation in PAPSS, easing processes for Nigerian SMEs and enabling faster intra-African trade payments.
“We have also embraced fintech innovation through our Regulatory Sandbox, allowing payment-focused fintechs to test secure, instant cross-border solutions under close CBN supervision,” he disclosed.
By Modupe Gbadeyanka
The merger and business combination between Unity Bank Plc and Providus Bank Limited remains firmly on course, a statement from one of the parties disclosed.
According to Unity Bank, there is no iota of truth in reports in certain sections of the media suggesting that the merger process had stalled, as the transaction remains firmly on track.
It was disclosed that the necessary regulatory steps have been completed, but only a few other steps to finalise the transaction, especially the final court sanction.
There had been speculations that both lenders may not meet the new minimum capital requirement of the Central Bank of Nigeria (CBN) before the March 31, 2026, deadline.
However, it was noted that the combined capital base of Unity Bank and Providus Bank exceeds N200 billion, which is the minimum requirement to retain a national banking licence under the CBN’s recapitalisation framework.
When completed, the Unity-Providus merger is expected to deliver a stronger, more competitive, and customer-centric financial institution — one with the scale, innovation, and reach to redefine the retail and SME banking landscape in Nigeria.
“The merger with Providus Bank significantly enhances our capital base, operational capacity, and strategic positioning.
“We are confident that the combined institution will be better equipped to support economic growth and deliver innovative financial solutions across Nigeria,” the chief executive of Unity Bank, Mr Ebenezer Kolawole, stated.
Recall that a few months ago, shareholders authorised the merger between the two entities at Court-Ordered Meetings. They also adopted the scheme of merger at their respective Extraordinary General Meetings (EGMs) in September 2025,
The central bank also backed the merger, with a pivotal financial accommodation to support the transaction. The merger also received a further boost with a “no objection” nod from the Securities and Exchange Commission (SEC).
The regulatory approvals form part of broader efforts to strengthen the resilience of Nigeria’s banking system, reinforce capital adequacy across the sector, and mitigate potential systemic risks.
The development positions the combined entity among the 21 banks that have satisfied the apex bank’s new capital threshold for national banking operations.
By James Edeh
SMEs are widely regarded as the engine of economic growth. According to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), in 2025, Nigerian SMEs continued to anchor the economy, representing approximately 96% of all businesses. These enterprises contributed over 48% to Nigeria’s GDP and accounted for between 84% of total employment. However, while the vast majority of SMEs play a vital role in national development, only a small minority have access to formal credit or the financial literacy required to scale and meet eligibility requirements.
FairMoney Microfinance Bank (MFB), a leading technology-enabled bank in Nigeria, is supporting national financial inclusion objectives and bridging the gap by providing solutions that directly assist small and medium-sized enterprises (SMEs). It does this not only by providing access to financing but also by offering efficient payment processing options that help SMEs scale up financially.
Access to Capital
Securing a loan through FairMoney MFB offers a streamlined path for Nigerian SMEs to transform potential into performance. By prioritising digital speed and accessibility, the microfinance bank enables eligible business owners in Nigeria to secure up to ₦5,000,000 without physical collateral; however, access remains subject to credit assessment. This rapid disbursement creates a real opportunity for entrepreneurs to act on time-sensitive growth prospects, whether that means restocking inventory ahead of a peak season, fulfilling a sudden large-scale order, or upgrading essential equipment. To improve their eligibility for higher loan amounts, SMEs simply need to increase their engagement with the FairMoney ecosystem; banking and managing finances directly through the app after an initial application using their BVN and business details.
Beyond the Bank Statement
Alternative credit scoring is the engine that allows FairMoney MFB to leverage broader data sets to better inform credit decisions for a wider range of SME customers. FairMoney MFB doesn’t just look at a bank statement; it looks at potential. By utilising Alternative Credit Scoring powered by advanced data analytics and machine learning, FairMoney MFB assesses creditworthiness based on non-traditional data, such as app usage patterns, transaction velocity, and digital footprints – with customer consent and in accordance with Nigerian data protection requirements. This approach opens the door for businesses with limited formal financial histories to access real growth opportunities that were previously out of reach. For the Nigerian SME, this presents the opportunity to scale from small-scale survival to ambitious expansion, securing the funding necessary to innovate and compete based on the real-time strength of their operations.
Smarter Savings
True business growth requires a shift from simple borrowing to disciplined wealth management, and FairMoney MFB empowers SMEs with a suite of specialised products designed to ensure their capital works as hard as they do. Through FairTarget, entrepreneurs can define specific financial milestones, such as purchasing equipment or securing a larger office, and automate their progress toward reaching them. For operational liquidity, FairSave offers a high-interest savings account where funds remain accessible while earning daily interest, while FairLock provides long-term stability by allowing businesses to secure surplus funds at premium interest rates, protecting capital from impulsive spending. Together, these features transform FairMoney MFB from a lender into a comprehensive financial partner to SMEs that fosters both immediate scalability and long-term fiscal health.
POS Systems
FairMoney MFB’s Point of Sale (POS) systems provide Nigerian SMEs with a robust infrastructure to accept online, mobile, and in-person payments seamlessly. By transitioning from a cash-only model to a multi-channel payment system, businesses can significantly reduce operational risks such as theft and accounting errors while expanding their reach to a nationwide customer base. This digital shift unlocks real-life opportunities for growth. A local retailer can move beyond foot traffic to sell to customers across the country via the web, while service providers can offer “Pay with Transfer” or card options that cater to the growing demographic of cashless consumers.
Every digital transaction creates a verifiable financial trail within the FairMoney MFB app, which the bank uses to build a more accurate credit profile for the merchant. This means that simply by making it easier for customers to pay, SMEs could potentially improve their credit profile and gain access to more competitive pricing needed for long-term expansion.
Maintaining detailed financial records has transitioned from a best practice to a regulatory necessity for SMEs. The current landscape, influenced by the Nigeria Revenue Service (NRS), increasingly values verifiable digital records as a means of supporting eligibility assessments for small business tax holidays. Maintaining such records through record keeping can facilitate compliance with requirements for exemptions, such as the 0% Company Income Tax (CIT) rate for businesses with an annual turnover below ₦100 million. Without accurate, time-stamped digital trails, including structured e-invoices and clear transaction histories, SMEs risk not only losing these vital fiscal reliefs but also facing significantly sharper penalties for late filing or non-compliance.
Beyond tax, streamlined records bridge the information gap that often hinders access to credit; by presenting a “financial compass” of real-time cash flow and profitability, business owners can prove their creditworthiness to partners, turning their compliance into a strategic tool for securing the capital needed to scale in an increasingly formalised market. FairMoney MFB continues to serve as a dynamic partner in an SME’s journey toward long-term scalability and financial stability.
James Edeh is the Head of Compliance at FairMoney Microfinance Bank
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn