As the second half of 2025 unfolds, Nigerian banks are entering a critical phase in their growth and stability journey. Industry analysts and investment experts forecast that the banks’ performance during this period will be largely driven by two major factors: their progress in meeting the Central Bank of Nigeria’s (CBN) recapitalisation directive and their ability to maintain or restore dividend payouts.
In a recent half-year macroeconomic report titled “Reconfiguration: From Global Trade to Quantum Innovation – A New Economic Era Emerges,” analysts at Comercio Partners emphasized the growing pressure on financial institutions to adapt swiftly or risk losing investor confidence. According to the report, market performance in H2 will reward banks that demonstrate strong capitalisation strategies and dividend sustainability amid macroeconomic challenges.
The CBN, in a directive issued in March 2024, mandated commercial banks with international licences to raise their capital base to ₦500 billion, while national and regional banks must raise theirs to ₦200 billion and ₦50 billion, respectively. Non-interest banks were also included in the recapitalisation scheme with targets of ₦20 billion (national) and ₦10 billion (regional). Banks have until March 2026 to comply.
Last week, following the 301st meeting of the CBN’s Monetary Policy Committee in Abuja, Governor Olayemi Cardoso disclosed that eight banks had already met the new capital requirement, with others making steady progress. The recapitalisation, according to the apex bank, is essential to boost sector resilience, support economic growth, and ensure Nigeria’s financial institutions meet international regulatory benchmarks.
However, analysts have warned that recapitalisation alone will not suffice. The end of forbearance policies and stricter enforcement of Single Obligor Limits will intensify the pressure on capital and profitability. Affected banks are required to submit capital restoration plans that must include asset quality improvement, cost efficiency measures, and business model adjustments.
Beyond recapitalisation, dividend payment strategies will significantly shape market sentiment. In the aftermath of the CBN’s temporary forbearance policy, which had affected dividend disbursement, investors are keenly watching for signs of reinstatement and sustainability.
According to Comercio Partners, “The Nigerian banking sector’s narrative is shifting from exponential balance sheet growth to a focus on sustainable profitability, underpinned by capital adequacy and disciplined risk management.”
Banks like GTCO are seen as industry frontrunners due to clean balance sheets, consistent dividend history, and strong operational metrics. On the flip side, institutions like Access Holdings, Zenith Bank, and First Bank, while fundamentally strong, may face temporary valuation headwinds unless clarity on dividends and regulatory compliance is achieved.
The report notes that with the Monetary Policy Rate held at 27.5%, net interest margins could experience some compression due to increased funding costs and competition. Meanwhile, gains from foreign exchange volatility are expected to reduce in H2 as naira stabilisation efforts take hold. This will shift emphasis toward core banking income streams and efficiency-driven growth.
As liquidity stabilises and regulatory oversight tightens, the performance gap between banks will be defined by how effectively they manage funding costs, execute capital strategies, and maintain asset quality.
“The future of Nigerian banks in the 2025–2026 cycle will depend on their ability to transition from high-yield, FX-driven profits to value creation through operational discipline,” the report added.
Despite near-term pressures, industry watchers remain optimistic about the long-term growth potential of Nigeria’s banking sector. Analysts at CardinalStone Partners noted that even in the short term, “tactical opportunities” exist for banks that surprise the market by sustaining dividends and preserving shareholder value.
The next few months will be pivotal. Nigerian banks that can navigate regulatory challenges, execute strategic recapitalisation, and maintain investor-friendly policies are likely to set the pace for the future of banking in West Africa’s largest economy.