The Central Bank of Nigeria (CBN) has warned that higher concentration risk from the ongoing banking sector recapitalisation could lead to investor fatigue and crowd-out other issuers in the capital market.
The warning was contained in the bank’s macroeconomic outlook for 2026.
Two years ago, the CBN gave banks a March 31, 2026 deadline to comply with the new capital threshold.
As of November 2025, the CBN said 16 banks had met the threshold.
According to the CBN, investor fatigue, combined with rising non-performing loans, may weaken banks’ balance sheets and pose systemic risks to the financial sector.
“Higher concentration risk from the ongoing banking sector recapitalisation could trigger investor fatigue and crowd-out other issuers. Together, these could derail the outlook for the financial sector,” it stated.
It added that “a significant rise in non-performing loans could impair asset quality, and weaken banks’ balance sheets, thereby posing systemic risk.”
The CBN reaffirmed its commitment to balancing price stability with output growth in 2026, assuring that it would deploy appropriate policy instruments to attract foreign investment and consolidate stability in the foreign exchange market.
The outlook also highlighted plans to deepen financial stability by strengthening the operational integration of the Global Standing Instruction (GSI) framework across financial institutions, enforcing credit discipline, and tightening cybersecurity regulations.
The report further noted that growth in monetary aggregates in 2026 is expected to be shaped by exchange rate movements, fiscal operations, election-related spending, and continued implementation of prudential measures.
The CBN projected that the capital market would remain bullish, supported by the recapitalisation exercise, rising investor confidence, and other policy measures aimed at fostering growth.
