First HoldCo Plc, FCMB Group Plc and Sterling Financial appear to be taking a more cautious approach to deploying fresh capital after Nigeria’s bank recapitalisation, with equity growth outpacing loan expansion in the first half of 2026, while Wema Bank moved more aggressively into lending.
The divergence among the four banks raises an early question about the impact of Nigeria’s ₦4.65 trillion banking recapitalisation: whether the new capital is reaching businesses and sectors that can drive production and jobs, or strengthening bank balance sheets without a corresponding expansion in productive credit.
Pinnacle Daily reports that Nigeria’s banks raised ₦4.65 trillion in fresh equity during the recapitalisation exercise, with ₦3.37 trillion, or 72.55 per cent, sourced locally. By the March 31, 2026 deadline, the Central Bank of Nigeria (CBN) said 33 of the country’s 37 banks had met the new minimum capital requirements.
The CBN expects the recapitalisation to strengthen banks’ capacity to finance large projects and support Nigeria’s ambition of becoming a $1 trillion economy. But the first-half results of the selected banks, which have released their half-year results, show that stronger capital has not translated uniformly into stronger lending.
Capital growth outpaces lending
The clearest evidence comes from FCMB Group, where total equity surged 40.43 per cent, while gross loans grew by only 4.41 per cent to ₦2.58 trillion.
At Sterling Financial, equity expanded 27.75 per cent, compared with 14.55 per cent growth in gross loans to ₦1.68 trillion, while First HoldCo recorded 9.87 per cent growth in total equity against 6.12 per cent growth in gross loans to ₦9.79 trillion.
Wema Bank, however, followed a different path, as its gross loans increased by 21.27 per cent to ₦2.18 trillion, significantly exceeding its 12.89 per cent growth in equity.
For Ecobank, its gross loans declined 6.65 per cent to ₦17.17 trillion, while its equity fell 8.23 per cent, largely reflecting foreign exchange translation effects.
The numbers show that recapitalisation is producing different responses across banks. While some are expanding their lending books, others are allowing capital to grow substantially faster than credit.
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First HoldCo puts more money into government securities and equities
The biggest indication of where some fresh financial capacity is being deployed comes from investment in government securities and equities.
First HoldCo increased its government securities portfolio by 34.47 per cent, from ₦8.11 trillion to ₦10.91 trillion. The bank therefore added ₦2.80 trillion to government securities, compared with only ₦565.23 billion in additional gross loans.
This does not establish that recapitalisation funds were directly invested in government securities. But the movement shows that the bank significantly increased its exposure to government securities while its loan book expanded at a much slower pace.
Wema Bank presents the clearest contrast, as its government securities increased by just 5.31 per cent, or ₦70.96 billion, while gross loans expanded by ₦382.15 billion, or 21.27 per cent.
Sterling’s government securities rose 10.04 per cent to ₦901.25 billion, against 14.55 per cent growth in loans, while FCMB’s government securities fell 7.67 per cent to ₦2.29 trillion, and Ecobank reduced its holdings by 10.91 per cent.
The stronger equity growth recorded by First HoldCo, FCMB and Sterling also raises a broader question about how the additional capital is being positioned within their balance sheets, particularly where growth in capital and financial assets is running ahead of credit expansion.
Wema takes the more aggressive lending route
A further review of the half-year results shows that the loan-to-deposit ratios (LDRs) further highlight the differences.
Wema’s gross LDR rose from 54.61 per cent to 63.09 per cent, reflecting its stronger appetite for lending. Its loans grew by 21.27 per cent while deposits increased by only 4.96 per cent.
The other banks moved in the opposite direction, as First HoldCo’s gross LDR fell from 48.87 per cent to 44.65 per cent. Ecobank’s declined from 50.49 per cent to 46.09 per cent, FCMB’s from 56.02 per cent to 52.51 per cent, and Sterling’s from 49.20 per cent to 46.53 per cent.
For First HoldCo, FCMB and Sterling, deposits therefore grew faster than loans, suggesting that a greater proportion of their expanding funding base was not converted into additional credit during the period.
But where is the productive credit?
The banks’ half-year results do not provide sufficient sector-by-sector data to determine precisely how much new lending went to agriculture, manufacturing, SMEs and construction.
Instead, the banks largely report credit exposure through categories such as term loans, overdrafts and specialised lending facilities.
FCMB disclosed specialised on-lending intervention schemes totalling ₦268.65 billion, including the Commercial Agriculture Credit Scheme, Babagona Agricultural Scheme and a Bank of Agriculture facility.
First HoldCo’s term loans rose to ₦8.48 trillion, while Wema’s term loans increased 20.8 per cent to ₦1.92 trillion. Ecobank held ₦14.87 trillion in term loans and ₦2.05 trillion in overdrafts.
However, the absence of detailed sectoral disclosure makes it difficult to establish whether the additional credit is flowing into the parts of the economy that can generate jobs, expand production and deepen investment.
This leaves a crucial distinction between more credit and more productive credit.
The real test of recapitalisation
Kazeem Bello, a development economist, had told Pinnacle Daily that Nigeria’s recapitalisation will only matter if it fundamentally changes how banks finance the economy.
He explained to Pinnacle Daily that the experience of successful economies shows that strong financial systems create and deploy capital to drive industrialisation and private sector growth rather than simply increasing banks’ balance sheets.
“The depth of the financial system is what creates capital, deploys capital and makes capital available for both the public and private sectors to access and utilise for economic transformation, infrastructure development and private sector expansion,” Bello said.
He argued that countries such as the Asian Tigers and Western economies after the Second World War relied on financial systems that financed infrastructure, industries and business expansion, while Nigeria has depended excessively on government spending.
“The engine of economic growth and development is generally facilitated by the private sector, and the role of the financial system in creating the much-needed capital can never be underestimated. Unfortunately, we continue to ignore this basic principle,” he said.
The interim results suggest that the recapitalisation has not yet produced a uniform shift towards aggressive lending. Wema is expanding credit significantly, but First HoldCo, FCMB and Sterling have all recorded stronger growth in equity than loans.
The bigger question is therefore not whether Nigerian banks are now better capitalised, but whether that capital will ultimately find its way into farms, factories, businesses and infrastructure — or remain largely within the financial system.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X