At least three Nigerian banks are likely to merge in early 2026 as pressure mounts on lenders to meet the Central Bank of Nigeria’s (CBN) new minimum capital requirements before the 31 March deadline.
According to DataPro’s 2026 Banking Sector Prospects in Nigeria, most of the country’s big banks have already crossed the new capital threshold.
Smaller banks, however, are running out of time and options, making mergers one of the most realistic survival paths.
DataPro’s Enterprise Risk Management analyst, Idris Shittu, said the recapitalisation exercise has triggered intense behind-the-scenes negotiations across the sector.“
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While the major banks are largely in compliance, tier-2 banks are under heavy pressure, and we expect about three major mergers by early 2026 as institutions scramble to meet the deadline,” he said.
Shittu warned that merging banks will face tough challenges after deals are sealed, including aligning different work cultures, integrating IT systems and managing inherited bad loans.
Beyond consolidation, he said, banks are also grappling with tighter regulation, limited liquidity and fast-moving fintech competitors.
A Cash Reserve Ratio of 45 per cent, Shittu noted, continues to tie down nearly half of banks’ deposits, pushing them to rely more on fees than traditional lending. At the same time, fintech firms such as Moniepoint and Opay are rapidly attracting retail and small business customers with faster, more flexible services.
Looking ahead, DataPro expects fewer banks to be operating in Nigeria by the end of 2026 as consolidation deepens. While this could create stronger and more resilient banks, Shittu cautioned that poor integration could undermine the benefits.
PwC, however, remains upbeat, saying recapitalisation and growing demand for digital financial services will attract fresh investment and support growth across banking, fintech and insurance in 2026.
