Nigeria’s banking sector is sound and stable

The Central Bank of Nigeria (CBN) reaffirmed the stability of the nation’s banking sector in June 2025 while introducing time-sensitive transitional measures for certain institutions that are still adapting to the cessation of temporary regulatory support that was implemented during the COVID-19 pandemic.

These actions are part of the wider execution of the 2023 recapitalisation initiative, which is designed to fortify the financial sector in alignment with Nigeria’s long-term economic development goals. The report revealed that the majority of banks have either fulfilled or are on a solid path to fulfilling the new capital requirements prior to the March 31, 2026, deadline.

For the few banks that are still undergoing transition, the CBN has imposed temporary limitations on capital distributions, including dividends and bonuses, to promote the retention of earnings and strengthen capital buffers. These modifications are in accordance with global regulatory standards and are consistent with practices observed in developed nations.

Nigeria’s capital framework continues to surpass global Basel III standards, demonstrating the CBN’s cautious approach to financial regulation. To sustain progress, the CBN should contemplate providing technical assistance to the affected banks to expedite compliance while preserving confidence in the sector.