With just over two and a half months to the recapitalisation deadline set by the Central Bank of Nigeria (CBN), Nigerian lenders are approaching a critical juncture, as consolidation is increasingly seen as inevitable for several banks. As of January 2026, about 22 of the 34 licensed commercial banks have met or exceeded the apex bank’s capital benchmark, representing roughly 65 per cent compliance. While the largest lenders have largely completed their recapitalisation programmes, mounting pressure is now focused on Tier-2 and Tier-3 banks, with DataPro’s latest outlook pointing to at least three possible mergers among mid-tier institutions.
Analysts warn that consolidation, while offering a lifeline, is fraught with challenges. Idris Shittu, an enterprise risk management expert at DataPro, said past consolidation exercises, particularly the 2005 banking reforms, exposed risks such as IT system failures and cultural clashes. He noted that mergers involving conservative Tier-1 banks and more aggressive Tier-2 acquirers could lead to decision-making bottlenecks and operational disruptions if not carefully managed.
Macroeconomic conditions have further complicated standalone capital-raising efforts, as rising interest rates, persistent inflation and tight liquidity have made fundraising more costly and uncertain. For smaller banks lacking strong retail franchises or diversified income streams, mergers are increasingly viewed as the least disruptive path to survival. However, analysts caution that the regulatory-driven surge in mergers and acquisitions carries significant post-merger integration risks, including IT harmonisation, cultural alignment and the transfer of non-performing loans, prompting intensified internal “war room” discussions around deal execution and risk mitigation ahead of the deadline.