Lagos: Some financial experts have emphasised the need for strong risk management and ethical governance to ensure that bank recapitalisation drives deliver sustainable economic growth. The experts made this known on Thursday at a virtual Risk Roundtable organised by the Association of Enterprise Risk Management Professionals (AERMP).
According to News Agency of Nigeria, the event, held in Lagos, had the theme: ‘Recapitalisation, Mergers and Acquisition in the Nigerian Financial System: Minimising Risks and Maximising Opportunities for Greater Post-Recapitalisation Value’. Prof. Pius Olanrewaju, President of the Chartered Institute of Bankers of Nigeria (CIBN), highlighted that the recapitalisation exercise had strengthened the resilience and capacity of financial institutions. By March 31, 2026, 23 banks had met the new capital requirements, collectively raising about N4.65 trillion. He noted that 72.55 per cent of these funds were sourced domestically, while 27.45 per cent came from international investors, reflecting strong local confidence and global interest.
Olanrewaju pointed out that recapitalisation was achieved without disrupting banking operations, with capital adequacy ratios improving beyond global benchmarks. However, he stressed that recapitalisation was only a foundation, with its true value lying in driving credit expansion, innovation, job creation, and broader economic growth. He advocated for enterprise risk management to be treated as a strategic enabler rather than a compliance obligation.
Dr Emomotimi Agama, Director-General of the Securities and Exchange Commission (SEC), also contributed to the discussion, emphasising that recapitalisation and mergers are vital to building resilient institutions and protecting investors. Represented by Mr Tarfa Makyur, Agama stated that revised capital requirements for market operators were designed to strengthen the financial system and support economic growth. He cautioned that increased capital alone would not reduce risk without effective governance, oversight, and disciplined execution.
Agama further explained that while mergers and acquisitions can drive efficiency and growth, they may also pose risks such as weak integration, poor governance, and overvaluation. He added that operators have until June 30, 2027, to meet the new capital thresholds under SEC guidelines and urged firms to embed risk management in decision-making processes to avoid transactions that do not create real value.
In his presentation, Alhaji Umaru Ibrahim, Global Board Chairman, Emeritus, Risk and Compliance Professionals, described recapitalisation as central to financial system stability and economic transformation. Ibrahim, a former Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), said the reform aligns with Nigeria’s ambition of building a one trillion-dollar economy by 2030 through stronger financial institutions. He warned that recapitalisation and mergers could introduce complex risks, including integration challenges, cultural misalignment, and potential value erosion.
Ibrahim stressed the importance of embedding effective risk management across all stages, from due diligence to post-merger integration and performance monitoring. He identified risk governance, integration management, and value optimisation as critical priorities for post-recapitalisation success.
Mr Oluropo Dada, President of the Chartered Institute of Stockbrokers (CIS), emphasised that ethical governance remains key to corporate sustainability. He stated that transparency, accountability, and fairness in capital raising and mergers are essential for building investor confidence and long-term value. Warning that weak governance could undermine recapitalisation gains, Dada underscored the potential for short-term strength but long-term value erosion.
According to him, ongoing reforms across banking, insurance, capital markets, and pensions will deepen liquidity, strengthen risk practices, and boost investor confidence. Dada stressed that collaboration among regulators, financial institutions, and risk professionals is crucial to achieving sustainable outcomes.