PRODUCTIVITY TEST BEGINS FOR BANKS AFTER RECAPITALISATION- DATA PRO
DATA PRO
A credit rating Agency,Data Pro announced that Nigerian banks are entering 2027 with stronger capital but tougher challenges.
According to DataPro Limited in its first edition of Risk Quarterly magazine, banks raised 4.65 trillion naira in the historic 2026 recapitalization. The average Capital Adequacy Ratio now stands at 25.5 percent.
But the gains came at a high cost. Banks wrote off 2.9 trillion naira in bad loans after COVID-era waivers ended. That wiped out 63 percent of the new capital.
DataPro says the question for 2027 is no longer how big the capital is, but how well banks use it.
It lists three major risks ahead.
One — the regulatory squeeze. The Central Bank is proposing a 20 percent buffer for holding companies. This could trap capital at the parent company level and reduce returns. Access Holdings and UBA would be hardest hit, needing an extra 656 billion and 416 billion naira.
Two,weak lending to the real economy. Banks now hold 180 trillion naira in assets. But small businesses, which make up 96 percent of Nigerian businesses, still get less than five percent of bank credit. DataPro blames a 45 percent Cash Reserve Ratio and Treasury bill yields at 21 percent that push banks toward government securities.
And Three — election-year volatility. The fourth-quarter liquidity surge ahead of elections comes as the Central Bank cut its benchmark rate by 350 basis points to 23 percent. But DataPro says credit to the private sector will stay tight because the Cash Reserve Ratio remains unchanged.
In its bottom line, DataPro says meeting capital requirements is no longer enough. In 2027, banks will be judged by how they turn capital into quality earnings by keeping cost-to-income ratios below 50 percent, loan-to-deposit ratios above 65 p exercent, and proving they can lend safely through the election cycle.
