Why banks’ capital raisings have been successful — Fitch

Ahead of the 2026 recapitalisation programme of Nigerian banks, foremost rating agency, Fitch Ratings, has said the ongoing capital raisings by financial institutions have been successful due to what it called, “Strong investor appetite.”

The rating agency in a report allayed fears of consolidation of banks, saying this is less likely as the banks race to meet the new capital requirements stipulated by the Central Bank of Nigeria (CBN).

Daily Trust reports that commercial banks have embarked on aggressive capital raising to meet the N500bn minimum capital stipulated by the CBN for international banks.

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In the report titled, “Nigerian Banks Progress Towards New Paid-In Capital Requirements,” Fitch said Nigerian banks are making significant progress in raising core capital to meet new paid-in capital requirements and are generally on track to meet the end-1Q26 deadline.

Fitch however provided an insight into the capital raising programmes of major financial institutions and their potential to meet the deadline.

It said, “The two largest banks, Access Holdings and Zenith Bank, are the first to secure enough fresh capital to meet the NGN500 billion requirement for an international licence. First HoldCo, United Bank for Africa and Guaranty Trust Holding Company are taking a phased approach.

“They have recently raised capital and have shareholder approval to begin raising more to meet the NGN500 billion requirement. First HoldCo’s and United Bank for Africa’s recent rights issues are awaiting final regulatory approval.

“Fidelity Bank and FCMB Group have completed initial capital raisings but will need to raise more to maintain their international licences. As second-tier banks, they must raise significantly more capital relative to their balance sheets than larger banks. They have extraordinary general meeting approval for this, although they could consider downgrading to a national licence as they each have just one foreign subsidiary.”

The report added that Ecobank Nigeria Limited (ENG) and Jaiz Bank needed only small capital injections to meet their requirements and have already achieved compliance.

“We estimate that ENG is still in breach of its total capital adequacy ratio (CAR) requirement of 10% but it has further capital-raising plans to restore compliance. Stanbic IBTC Holdings has launched a rights issue to raise capital to maintain its national licence,” it added.

The report however explained that the capital raisings “are unlikely to lead to banks with Long-Term Issuer Default Ratings (IDRs) of ‘B-’ being upgraded given the constraint of Nigeria’s ‘B-’/Positive Long-Term IDR.”

“However, they could contribute to Outlook revisions to Positive for some banks, and, providing CAR compliance is restored, to upgrades for UBN and ENG (both rated ‘CCC’). Capital raisings are more likely to affect National Long-Term Ratings, which measure the relative creditworthiness of Nigerian issuers,” the report added.