Nigerian banks have raised a combined N2.4 trillion in fresh capital from the capital market in the first quarter (Q1) of 2025, marking a major milestone in the Central Bank of Nigeria's ongoing banking recapitalisation drive.
The massive fundraise signals renewed investor confidence in the banking sector and underscores the strength of the Nigerian capital market, which has delivered strong returns in recent years.
Data from the Nigerian Exchange Limited (NGX) show that the market's All-Share Index (ASI) posted a year-to-date gain of 2.66% in Q1 2025, despite a minor correction in March. The index rose from 102,926.40 points on December 31, 2024, to 105,660.64 points by March 28, 2025.
Investor interest in bank stocks surged, with the NGX Banking Index outperforming other sectors, gaining 6.96% by the end of Q1. In comparison, the Consumer Goods Index rose by 4.86%, while the Industrial, Insurance, and Oil & Gas indices posted negative returns of -2.30%, -2.71%, and -9.34%, respectively.
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According to a Proshare newsletter, the N2.4 trillion raised has "reinforced market confidence and driven sectoral growth," with most banks now entering the second phase of their recapitalisation plans. The rally was also supported by robust dividend declarations — including N4.00 per share from Zenith Bank, N3.00 from UBA, and N8.03 from GTCO.
Analysts say the drop in inflation — from 34.8% in December 2024 to 23.18% by February 2025 — also boosted investor sentiment, creating a more stable environment for banking operations and investments. Lower inflation is helping to reduce operational costs and improve business activity, with banks benefiting from increased lending and deposits.
The recapitalisation programme is aimed at strengthening the banking sector's resilience and compliance with higher regulatory capital requirements. Market watchers expect continued reforms, including the recently passed Investments and Securities Act 2025, to drive even greater market participation and attract foreign inflows.
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