The Business NG - December 19, 2025

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Editorial: Banking Reform Must Balance Stability and Confidence

Nigeria’s banking sector is undergoing one of its most consequential reforms in years as the Central Bank of Nigeria enforces a tough recapitalisation deadline of March 31, 2026. The recent revocation of the licences of ASO Savings and Loans Plc and Union Homes Savings and Loans Plc sends a clear signal: regulatory forbearance is over.

This firm stance strengthens financial stability, but it also raises the stakes for weaker institutions scrambling to survive. Investor interest—especially from the Middle East and Europe—shows confidence in Nigeria’s long-term banking prospects and validates the CBN’s push for credible, well-capitalised ownership. Yet, consolidation must not become a fire sale that erodes trust or sidelines domestic participation.

Banks exploring mergers, acquisitions, or foreign partnerships reflect a sector adapting under pressure. Still, the regulator must balance discipline with transparency to avoid systemic shocks. Recapitalisation should ultimately produce fewer but stronger banks—institutions capable of supporting growth, safeguarding deposits, and restoring confidence in Nigeria’s financial system.