M&A: Numbers of Banks in Nigeria to Shrink in 2026 —DataPro
With the deadline for banking industry recapitalisation on the horizon, credit research agency DataPro has forecast a reduction in the number of banks. The firm noted that this impending deadline has initiated ‘war room’ conversations centered on executing deals and managing risks.
While the top 5 big banks have successfully met their new capital base, a report released by the ratings agency suggests there are three tier-2 banks that may merge their operations—without mentioning their corporate identities.
By the end of 2026, the Nigerian banking industry is expected to consolidate significantly, shrinking in number, DataPro echoed in its latest banking industry update.
“Tier-2 Banks are under increasing pressure to comply, with three significant mergers expected by early 2026 as institutions scramble to meet the March 31 recapitalisation deadline.
By the end of 2025, major banks such as Access, Zenith, GTCO, UBA, FBN and Stanbic IBTC have successfully met the ₦500 billion minimum capital threshold required by the Central Bank of Nigeria (CBN).
While the regulatory push has spurred an active M&A environment, it has also brings with it considerable risks.
DataPro said consolidation promises a more resilient banking system capable of underwriting larger transactions and supporting Nigeria’s ambition toward a $1 trillion economy but noted that integration risks loom large.
Post-merger integration challenges identified include IT system harmonisation, cultural alignment, and the migration of Non-Performing Loans (NPLs), which could strain newly merged entities, especially among smaller banks.
DataPro said past consolidation efforts, such as those in 2005, highlight the potential pitfalls of IT system failures and cultural clashes.
Particularly challenging is the merger of conservative Tier-1 banks with aggressive Tier-2 acquirers, which could cause decision-making gridlock and operational disruptions.
Success in this consolidation phase will depend heavily on effective due diligence around asset quality and cultural fit, as well as robust post-merger integration planning. Nigeria’s Non-oil Export Rises by 11.5% to $6.1bn in 2025
