Nigeria’s biggest banks are in the middle of an intense race to raise capital, but this time the strongest signals are not coming from foreign investors or pension funds. Instead, they are coming from the top floors of bank headquarters. Across Tier-1 banks, senior executives and influential insiders are using personal and corporate funds to buy more shares, strengthen control, and support large capital-raising plans ahead of a major regulatory deadline that is reshaping the industry.

The trigger for this rush is the Central Bank of Nigeria’s (CBN) directive that banks with international licences must raise their minimum capital base to N500 billion by April 2026. What started as a compliance issue has quickly turned into a contest for dominance, credibility, and long-term profit in Africa’s largest economy.

A clear example played out last week when shareholders of Access Holdings Plc approved a plan to raise up to N40 billion through a private placement. A private placement of shares is when a company sells stock directly to a select group of investors (like institutions or wealthy individuals) instead of the general public through a stock exchange, allowing for faster capital raising, less regulation, and lower costs than an IPO, though shares are restricted and illiquid.

The approval was given at an Extraordinary General Meeting (EGM) held on December 18. Under the plan, the board is authorised to issue nearly two billion new ordinary shares at N20.25 per share, or another price determined by the board, to selected investors.

While such resolutions are common during recapitalisation periods, market analysts say this one highlights a deeper change in strategy. Bank boards and top executives are no longer satisfied with simply approaching the market for funds. They want to shape the process, attract the right investors, and protect their influence while benefiting from future growth.

Insider buying has therefore surged across the banking sector. This is because capital raising today is not only about meeting regulatory rules; it is also about who controls the balance sheet and decision-making power in the years ahead.

This renewed confidence is supported by strong financial results. Nigeria’s Tier-1 banks have enjoyed an exceptional profit cycle over the past two years. Sector-wide Return on Equity (ROE) is estimated at between 20 and 25 percent for 2025. Although this is slightly lower than the nearly 30 percent recorded in 2023 and 2024, it remains one of the highest levels among emerging markets.

High interest rates, improved pricing of loans, and increased income from government securities have boosted earnings across the industry. The figures tell the story. Zenith Bank reported N679.9 billion profit after tax in 2024, representing a 202 percent year-on-year increase. United Bank for Africa (UBA) followed with N607 billion, up 257 percent, while Access Bank posted N612.4 billion, almost 300 per cent higher than the previous year.

For bank executives overseeing these profit levels, buying more shares is both a show of confidence and a calculated financial move. Many insiders believe bank stocks are still undervalued compared to their earnings potential, especially as recapitalisation is expected to allow larger loan books, higher single-obligor limits, and wider regional expansion.

Perhaps the clearest sign of this trend is the recent move by billionaire investor and chairman of First HoldCo Plc, Mr. Femi Otedola. On December 18, he acquired additional shares worth N14.8 billion, buying nearly 370 million units at N40.06 per share through his investment company, Calvados Global Services Limited.

Following the transaction, Otedola’s combined direct and indirect stake in First HoldCo rose to about 17.56 percent, up from 16.1 percent in September. The market responded immediately, with the bank’s share price jumping 7.7 percent to close at N42.65 on the day of disclosure. First HoldCo’s market capitalisation has now climbed to about N1.84 trillion, reflecting a 52 percent gain so far this year.

Analysts say the message was clear: Otedola is not just showing support for the bank, but also strengthening his control at a time when ownership structure matters greatly. With recapitalisation under way, having a strong and committed core shareholder reduces risk and reassures other investors.

Zenith Bank has also seen similar insider confidence. Its Chief Executive Officer and Group Managing Director, Dr. Adaora Umeoji, recently bought 11 million shares valued at about N732.6 million. Market observers describe the purchase as a strong signal of management’s belief in the bank’s strength and future earnings.

Such insider purchases serve several purposes. They reassure the market that management expects profits to remain solid even if ROE moderates. They also align executives more closely with shareholders at a time when investors are concerned about dilution from new share issues.

Beyond insider buying, bank boards are designing large capital raises to gain long-term advantage. Access Holdings has already raised N365 billion through a rights issue that was strongly subscribed, pushing its capital well above the N500 billion requirement. Zenith Bank followed with over N350 billion in fresh equity, while Stanbic IBTC Holdings crossed the threshold with support from its parent company, Standard Bank of South Africa.

FCMB Group Plc has taken an even bigger step. Its shareholders recently approved plans to raise up to N400 billion in fresh capital, allowing the group to meet regulatory requirements well ahead of the March 2026 deadline. Management says the funds will improve capital strength, reduce expensive deposits, and speed up digital and international growth, with earnings per share expected to rise by more than 50 per cent over the next two years.

In today’s Nigeria, being a Tier-1 bank is no longer just about size. It is about the ability to raise capital quickly, earn investor trust, and deploy funds profitably across borders and digital platforms.

As regulatory pressure grows, bank executives are stepping forward not just as managers but as key investors. By committing personal and corporate resources to share purchases and capital raises, they are securing influence, supporting valuations, and positioning themselves for the next phase of growth.

In an industry where profits are high but competition is fierce, ownership is becoming destiny. And Nigeria’s banking leaders are making it clear that they intend to own the future they are building. (Nigerian Tribune)

Update news