Business

Only Seven Banks Can Meet CBN Recapitalisation Requirements – Report

Published

2 years ago

March 17, 2024

No fewer than 17 out of the existing 24 Deposit Money Banks may be unable to meet the Central Bank of Nigeria’s capital requirement if it is increased from its current N25bn, according to a report by Ernst and Young.

The new report, titled “Navigating the Horizon: Charting the Course for Banks amid Plans for Recapitalisation”, noted that if the apex bank raised the capital base of commercial banks in the country by 15-fold from the current N25bn, only seven banks may survive.

The CBN Governor, Olayemi Cardoso, had in several fora stated that the apex bank would consider an increase in the minimum capital base of banks in the country as part of its efforts to strengthen their capacity to support Nigeria’s drive to become a $1tn economy by 2026.

The current capital base is stratified based on the type of banking license – banks with regional, national and international licenses are currently expected to maintain a minimum capital base of N10bn, N25bn and N50bn, respectively.

The proposed increase in the capital base is coming nearly two decades after the CBN’s 2004 banking reform, which led to an increase of the then prevailing capital base from N2bn to N25bn.

The 2004 banking reform was characterised by massive mergers and acquisition activities, which ultimately resulted in the reduction of the number of banks in the country from 89 to 25 banks.

In the last few months, FBN Holdings, Wema Bank and Jaiz Bank had proposed Rights Issues, while Fidelity Bank announced plans to raise additional capital via the issuance of 13,200 billion ordinary shares via public offer and rights issue.

Ernst and Young, a global financial services company, said in the report that some banks may depend on different recapitalisation options, which include mergers and acquisitions, initial public offerings, placements and/or right issues and undistributed profit (retained earnings) despite financial soundness indicators show that Nigerian banks were largely safe and resilient as of 2023.

According to the report, the recent plan by the CBN to increase the capital base of banks will lead to a series of mergers and acquisitions as witnessed during the last recapitalisation exercise in 2004/2005.

The report read partly, “The recent plan by the CBN to increase the capital base of banks could again lead to M&A activities but not as widespread as was the case in 2004/2005 given the relatively solid financial positions of the banks today as well as the occurrence of several M&A activities in the banking sector over the past 10 years.

“While the CBN governor did not indicate the magnitude of the proposed hike in the capital base, we have assumed what the proposed increment will be based on three different scenarios underpinned by current macroeconomic conditions. On the back of that, we were able to determine the number of banks (across the three licence types) that may fall below the new minimum capital thresholds.

“In a worst-case scenario, i.e., given a capital multiplier of 15, about 17 out of 24 banks would not meet the new minimum capital.”

The report noted that the plan to recapitalise banks was premised upon the recent devaluation of the naira in 2023.

It explained that the exchange rate as of 2005 during the last exercise in 2005 stood at N132.9/$ but the naira currently exchange for over N1400/$.

According to the firm, this implies that the recapitalisation may require a capital multiplier of 10 or more based on the exchange rate differentials.

“On this basis, a worst-case scenario given a 15x capital multiplier for 24 banks will be considered based on the type of banking licenses held. We have benchmarked the current capital of these banks against the current capital requirement and four recapitalization scenarios,” it noted.

PUNCH

Business

Why We Sited Our Multi-Billion Naira Automobile Firm Branch in Benin – Skyewise Group CEO

Published

20 hours ago

May 4, 2026

Editor

Dr. Elvis Abuyere, Chief Executive Officer and Managing Director of Skyewise Group, an automobile firm, has explained the reason for establishing a branch of the company in Benin City, the Edo State capital, describing the ancient city as “a growing economy full of enormous potential for vibrant youth.”

He added that the company considers Edo State one of the most interesting states, noting that the decision aligns with its long-term vision.

Abuyere, who spoke in Benin on Monday while taking journalists on a tour of the new automobile facility, said:
“We started very small — from Abuja to Lagos and now Benin. It is a joy and privilege for us to have completed this amazing regional office with Skyewise Group.”

According to him, beyond the automobile business, Skyewise Group is in Benin to invest in real estate, logistics, youth empowerment, and credit management. “Aand also to lend our support to what the Edo State Government is doing, knowing the fact that there is an agenda,” he added.

The young CEO urged youths in Nigeria, particularly those in Edo State, to embrace entrepreneurship, stressing that “we believe it is the future of Africa,” especially Nigeria.

He said Nigeria stands as the giant of Africa and that its youth must take bold steps in the entrepreneurship landscape.

According to Abuyere, to ensure Edo youths actualise their entrepreneurial potential, the company has prepared soft loans to help them start businesses, adding that Skyewise Group is not limited to automobile operations.

He said: “More importantly to us is youth empowerment. We want our youth to be empowered, and this is where the Skyewise Foundation comes in.

“We believe the future of Africa is entrepreneurship, and that future lies in the hands of the young people of Nigeria. We want to empower them to stand the test of time, build something meaningful, and reduce unemployment and insecurity in our land.

“I believe we need to begin taking bold steps by refining the mindset of our young people. We need to give them a sense of belonging and direction.

“We have been addressing the liquidity gap in society by providing microloans to support businesses in our environment and in Benin City.”

When asked why he chose Benin City for the multi-billion naira automobile firm, Abuyere noted: “I think this is the first automobile showroom in Edo State where you can see a car lifted from the ground floor to the first floor and beyond.”

Business

JUST IN: Nigerian Filling Stations Reduce Fuel Price After Hike

Published

3 days ago

May 2, 2026

Editor

Nigerian filling stations reduced their Premium Motor Spirit price on Saturday, barely 24 hours after the hike.

Checks by DAILY POST showed that Ranoil, Empire Energy, and other filling stations in Abuja adjusted their petrol pumps to N1,365 and N1,375 per litre respectively, down from N1,440 per litre on Friday.

This means that petroleum marketers dropped their fuel price by N65 and N75 per litre. DAILY POST reports that the move was to attract patronage from customers.

Recall that three days ago, Nigerian filling stations had raised their petrol pump price to between N1,365 and N1,440 nationwide after Dangote Refinery and depot owners increased ex-depot prices to around N1,275 and N1,290 per litre.

According to DAILY POST, while the Nigerian National Petroleum Company Limited and MRS Bovas filling stations raised their petrol price to around N1,365 per litre, others adjusted theirs above N1,440 per litre.

However, with the latest fuel price reduction by Ranoil and Empire Energy, the majority of filling station outlets now dispense petrol between N1,365 and N1,375 per litre.

This development comes as the ripple effect of crude oil prices continues to impact Nigeria’s domestic fuel price.

Brent and West Texas Intermediate crude rose to $114 and $105 per barrel before dropping to $108 and $101 after the filing of this report.

Business

Dangote Refinery Hikes Petrol Price

Published

6 days ago

April 29, 2026

Editor

Dangote Refinery has increased the ex-depot price of petrol by N75.

The refinery announced the increase on Wednesday, hiking the the price from N1,200 to N1,275 per litre.
In the same way, coastal prices have gone up to N1,215 per litre.

This adjustment amid Brent crude trading at $114.80 per barrel marks a 3.15% increase.

DAILY POST reports that Brent crude has increased to $115 per barrel, while West Texas Intermediate rose to $103 per barrel on Wednesday.