The Central Bank of Nigeria recently announced new minimum capital requirements for banks, including commercial, merchant and non-interest banks.

In a statement signed by CBN's Acting Director of Corporate Communications Department, Sidi Ali, the minimum capital base for commercial banks with international authorisation is N500 billion.

Banks with national authorisation are now N200 billion, and the new requirement for those with regional authorisation is N50 billion.

Ali also disclosed that the new minimum capital for merchant banks would be N50 billion, while the new requirements for non-interest banks with national and regional authorisations are N20 billion and N10 billion, respectively, Punch reports.

What is a capital base?

Capital base is a term used by individual investors, publicly traded companies, and banks to refer to a base level of funding.

CBN sets deadline

In another CBN circular signed by the Director Financial Policy and Regulation Department, Haruna Mustafa, the apex bank instructed that all banks are required to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026.

Based on financial statements, here is how each Nigerian bank's capital base stands.

Banks that need N500bn

Ecobank - N353.513

Zenith Bank - N270.745

Access Bank - N251.811

First Bank - N251.340

Union Bank - N148.090

GTBank - N138.187

FCMB - N125.294

UBA Bank - N115.815

Fidelity Bank - N115.753

Citibank - N14.438

Banks that need N200bn

Stanbic IBTC - N109.349

Sterling Bank - N57.154

Polaris Bank - N50.433

Unity Bank - N31.872

Globus Bank - N25.064

Providus Bank - N16.331

Wema Bank - N15.177

SunTrust Bank - N11.839

Reacting to the bank's new capital requirements and shortfall, financial analyst Kunle Afolabi explained that it is likely some banks will downgrade their license to meet the CBN's requirements while others will use rights issues to raise funds.

He said: "The obvious move for banks in question is to provide their current shareholders with the opportunity to purchase additional shares at a discounted rate which is called right issues.

"However, some banks may opt for an alternative approach, such as a bonus issue. This involves issuing additional share capital to increase their paid-up or paid-in capital, rather than conducting a rights issue.

"Furthermore, there is the potential for certain banks to pursue both options, implementing both a rights issue and a bonus issue as Plan A and Plan B respectively"