The Central Bank of Nigeria (CBN) has reportedly granted Union Bank of Nigeria, Polaris Bank and Keystone Bank an additional regulatory window to conclude their recapitalisation processes, despite the expiration of the industry-wide deadline.
Sources familiar with the development disclosed that the apex bank approved a three-week extension for the three institutions, allowing them to address outstanding issues linked to their capital restructuring plans.
The move comes after Nigerian banks officially concluded the recapitalisation exercise on March 31, with all institutions expected to meet the revised capital requirements introduced by the CBN. However, the regulator is said to have made special provisions for the three lenders because of unique legal and regulatory challenges affecting their operations.
According to a source, the decision was influenced by “the circumstances, including legal and regulatory” issues confronting the banks, which have remained under regulatory management since the CBN's intervention.
Under the new capital framework, banks operating with national commercial banking licences are required to maintain a minimum share capital and share premium of N200 billion. Industry estimates indicate that Union Bank, Polaris Bank and Keystone Bank collectively require no less than N350 billion to comfortably retain their national banking licences.
The banks also have the option of scaling down their operations and converting to regional banking licences, which carry a significantly lower minimum capital requirement of N50 billion.
The recapitalisation programme, one of the most significant banking reforms in recent years, raised the minimum capital thresholds across the industry. Commercial banks with international authorisation are now required to maintain N500 billion in capital, while national banks must hold N200 billion and regional banks N50 billion.
For merchant banks, the minimum capital benchmark was fixed at N50 billion. National non-interest banks are expected to maintain N20 billion, while regional non-interest banks require N10 billion.
The three banks have remained under close regulatory scrutiny since January 2024 when the CBN dissolved their boards and management teams. At the time, the regulator cited violations of provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.
According to the apex bank, the institutions were found wanting in areas including regulatory compliance, corporate governance standards and adherence to licensing conditions.
The CBN had stated that the affected banks were involved in activities that posed risks to financial system stability, prompting the intervention.
Legal disputes have also complicated the situation, particularly regarding ownership structures. One of the banks has been embroiled in prolonged court battles initiated by former shareholders challenging the regulator's actions.
In the case of Union Bank, former owners recently secured a judgment from the Federal High Court that nullified the CBN's takeover of the institution. The ruling, however, remains subject to appeal after the apex bank challenged the decision.
Sources said the regulator is determined to ensure that the three institutions are given sufficient opportunity to explore every available recapitalisation pathway before any final decision is taken.
These options include raising fresh capital from public or private investors, pursuing mergers and acquisitions, or restructuring their licence categories to align with their financial capabilities.
Insiders noted that the banks currently favour “standalone options,” with a focus on attracting new investments and, where necessary, adjusting their operational licences rather than pursuing merger arrangements.
Meanwhile, the CBN has described the broader banking recapitalisation programme as a success. In a statement issued after the conclusion of the exercise on March 31, 2026, the regulator announced that 33 banks successfully met the revised capital requirements.
According to the apex bank, Nigerian lenders collectively raised N4.65 trillion over the 24-month recapitalisation period, significantly strengthening the sector's resilience and its capacity to support economic growth.
“The programme recorded strong participation from both domestic and international investors, with 72.55 per cent of capital sourced locally and 27.45 per cent from international markets, reflecting sustained confidence in the Nigerian banking sector,” the CBN stated.
While celebrating the outcome, the regulator acknowledged that a few institutions remained affected by unresolved matters.
In what industry observers believe was a reference to Union Bank, Polaris Bank and Keystone Bank, the CBN noted that “a limited number of institutions remain subject to ongoing regulatory and judicial processes, which were being addressed through established supervisory and legal frameworks.”
CBN Governor Olayemi Cardoso has also sought to reassure customers and stakeholders that the affected banks remain fully operational despite the expiration of the recapitalisation deadline.
He maintained that the apex bank would continue supporting efforts aimed at resolving the outstanding legal and regulatory issues facing the institutions, while ensuring that financial stability and depositor confidence remain protected.