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Nigeria’s Banking Shake-Up: 7 Things You Need to Know About the N900bn Capital Injection
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60 days agoNigeria’s Banking Shake-Up: 7 Things You Need to Know About the N900bn Capital Injection
The Nigerian banking sector is in the middle of its biggest transformation since consolidation in 2005. Forget the jargon—here’s what it really means: more money in the system, tougher rules from the Central Bank, and a race among banks to prove who’s strong enough to survive the new era.
Agusto & Co’s 2025 Banking Industry Report just dropped, and here’s what you need to know (without falling asleep).
1. The ₦900 Billion Boost Is Coming
By the end of 2025, Nigerian banks are expected to raise another ₦900 billion to meet the Central Bank’s new capital requirements. Think of it as banks fattening their wallets to withstand shocks and fund bigger ambitions.
2. Banks Are Already Loading Up
In the last 19 months, lenders raised about ₦2.5 trillion—mostly from Nigerian investors. Yes, ordinary Nigerians (through pension funds, institutional investors, and HNIs) are betting big on banks. This local confidence is a good sign.
3. Commercial Papers Are Back in Fashion
Facing high interest rates, banks have dusted off an old financing playbook: commercial papers. In just 7 months of 2025, they issued about ₦750 billion worth. Expect even more in the coming months.
4. The Liquidity Tank Is Full (For Now)
Despite pressure, banks are still swimming in liquidity. The industry’s liquidity ratio is expected to top 60% by year-end, helped by treasury securities. Translation: there’s enough cash in the pipes, at least for now.
5. But… Non-Performing Loans Are Creeping Up
Here’s the not-so-pretty side: bad loans climbed to 5.2% in 2024 and could hit 6.9% in 2025 once regulatory forbearances end. Some loans that were “on life support” are about to be called out for what they are. Expect a few write-offs.
6. Profits Are Taking a Hit
After two years of bumper profits (thanks to FX revaluation gains), 2025 looks less rosy. Agusto & Co projects a 19% drop in pre-tax profits as banks take heavy impairment charges. Still, this is more like a detox than a death sentence.
7. 2026 Could Be the Bounce-Back Year
With capital injections completed and the worst of the write-offs out of the way, profitability is expected to rebound in 2026. The outlook? Stable. Translation: the storm will pass, but only the well-capitalized banks will emerge stronger.
Bottom Line for Readers:
Nigeria’s banks are in a survival-of-the-fittest phase. For investors, this is a chance to spot the strong players early. For customers, it means more stability in the long run. And for the industry? It’s a reset moment that could define the next decade of Nigerian banking.