CBN Deadline Threatens Small Nigerian Banks with Mergers

Fitch Ratings has issued a cautionary statement indicating a high risk of mergers, acquisitions, or licence downgrades for Nigeria's third-tier banks. This warning follows the Central Bank of Nigeria's (CBN) enhanced capital requirements for all banking segments aimed at fortifying the industry's financial stability. While top-tier banks have adeptly mobilized resources through shareholder support and capital markets, smaller banks struggle to meet the raised capital requisites. As a consequence, these smaller banks are at risk of consolidation or downgrades. Many smaller banks are yet to finalize their recapitalization strategies or secure necessary shareholder approvals, leading to potential restructuring or regulatory downgrades.