No fewer than three bank mergers are expected in Nigeria in the coming months as some financial institutions intensify efforts to meet the Central Bank of Nigeria (CBN)’s recapitalisation deadline, a new industry report has revealed.

The report, which reviewed the outlook of Nigeria’s banking sector ahead of the deadline, indicated that while top-tier banks have largely made significant progress in meeting the new capital requirements, several mid-tier and smaller banks are under pressure to shore up their capital base.

According to the findings, mergers and acquisitions have emerged as a viable option for banks that may be unable to raise fresh capital through rights issues, public offers or private placements before the regulatory deadline.

The CBN had earlier announced a new recapitalisation programme aimed at strengthening the financial system, improving banks’ capacity to absorb shocks, and positioning the sector to support Nigeria’s long-term economic growth objectives.

Under the new framework, banks are required to meet revised minimum capital thresholds depending on their licence category, with failure to comply likely to attract regulatory sanctions, including forced mergers, acquisitions or licence downgrades.

The report noted that the recapitalisation exercise has triggered heightened activities within the banking industry, with institutions exploring strategic partnerships, consolidation talks and other balance-sheet strengthening measures.

It added that consolidation could lead to a reduction in the number of operating banks in the country but would ultimately result in stronger institutions with enhanced capital buffers and improved ability to finance large-scale projects.

Analysts cited in the report warned, however, that mergers often come with challenges such as integration of systems, alignment of corporate cultures and management restructuring, especially within a limited timeframe.

Stakeholders in the financial sector have urged banks to act swiftly to avoid last-minute regulatory pressure, stressing that early compliance would boost investor confidence and ensure stability in the industry.

The report further projected that merger and acquisition activities in the banking sector could intensify as the recapitalisation deadline draws closer, with regulatory authorities expected to closely monitor compliance levels.

The recapitalisation exercise is part of broader reforms by the CBN to strengthen financial intermediation, promote economic resilience and safeguard the Nigerian banking system against domestic and global shocks.