LAGOS — The Central Bank of Nigeria (CBN) has warned that the successful conclusion of the N4.65 trillion ($3.4bn) banking recapitalization exercise must not become a “catalyst for instability,” urging bank boards to prioritize governance over aggressive growth.
Speaking on behalf of the apex bank, Dr. Blaise Ijebor, CBN Director of Risk Management emphasized that while the industry has secured massive capital buffers, the focus must now shift to how that capital is deployed.
He cautioned that increased liquidity often creates a temptation for “excessive risk-taking” that could undermine the very stability the recapitalization sought to achieve
“Capital builds strength, but governance sustains it. The difference between success and failure in this post-recapitalization era will be shaped by governance, discipline, and strategic clarity.” He said.
Beyond mere lending limits, the regulator is demanding a “governance-first” approach. Bank boards are now required to demonstrate how their new capital will be deployed across diversified portfolios, with a heavy emphasis on stress testing against ongoing macroeconomic headwinds such as inflation and currency fluctuations.
The 24-month recapitalization program, which officially closed in March 2026, saw the Nigerian banking industry undergo its most significant transformation in two decades. While the exercise was designed to create a N1 trillion economy-ready banking system, the CBN is now signaling that its primary focus has shifted from the quantity of capital to the quality of its management.
Financial analysts expect that this directive will lead to a more conservative lending environment in the second half of 2026, as banks prioritize systemic safety over aggressive market share acquisition.
