The Business NG - July 25, 2025

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Editorial Focus for BusinessNG, July 25, 2025
Investor Caution Grows Amid Bank Capital Drive

Nigeria’s banking sector is racing to meet the Central Bank of Nigeria’s recapitalisation deadline, but storm clouds are gathering. While over N3.2 trillion in fresh equity and debt is being mobilised across banks—from Wema to Ecobank and Sterling—investors are beginning to ask tough questions.

The concern is not just dilution of shares or reduced earnings per share (EPS), but whether this flurry of fundraising is sustainable or inflating stock valuations beyond reason. With banks offering multiple instruments, including rights issues, bonds, and private placements, confidence must be balanced with clarity.

The CBN says eight banks have met the threshold so far, but market watchers want more transparency on how the influx of capital will be managed post-raise—especially in a volatile macroeconomic environment.

While recapitalisation is essential for strengthening the financial system, it must not come at the cost of long-term shareholder value. Regulators, boards, and CEOs must tread carefully to avoid turning this reform win into a market confidence risk.