Banks Maintain Strong Capital Position as Most’s CAR Steady above Regulatory Minimum

Nigerian banks demonstrated robust capital adequacy throughout the 2025 financial year, with most institutions maintaining their capital adequacy ratios (CAR) comfortably above the regulatory minimum set by the Central Bank of Nigeria (CBN).

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The Nigerian banking industry has continued to maintain a strong capital positions with average capital adequacy ratio (CAR) closing 2025 financial year above regulatory requirement.

Guaranty Trust Holding Company Plc (GTCO) stood out, reporting a CAR of 43.82% for 2025, an increase from 39.31% in 2024. This ratio significantly exceeds the 15% regulatory minimum, providing substantial headroom for future expansion and risk-taking, according to the company's investor presentations. Tier 1 capital formed a substantial part of GTCO's CAR, highlighting its strong capital generation capabilities.

The Central Bank of Nigeria affirmed the banking industry's resilience, noting that key financial soundness indicators remained within prudential thresholds. The industry's Liquidity Ratio (LR) was reported at 63.38%, well above the 30% requirement, indicating a strong capacity to meet short-term obligations and facilitate financial intermediation. The overall CAR of 12.05% for the industry underscored robust solvency and resilience against credit and market risks.

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The development highlighted the strong capacity of the industry to meet near-term obligations and an enhanced financial intermediation. The CAR at 12.05 per cent remained above the 10.00 per cent regulatory minimum, underscoring robust solvency and resilience against credit and market risks.

Despite the generally strong performance, First Holdco reported a CAR of 8.21% for 2025, falling below the regulatory minimum. The company attributed this to issues within its banking subsidiary. However, First Holdco stated that its CAR was restored by March 2026 through improved earnings and a capital injection, with further improvements expected.

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Tier 1 capital remained a very significant component of the Group’s CAR closing at 39.5 per cent, representing 90.1 per cent of the Group’s CAR of 43.8 per cent. Strong Capital generation and robust capital position provides the Group with the needed headroom required for future expansion and risk-taking.

Overall, the banking sector's financial soundness indicators reaffirm its stability and strong capital adequacy, bolstering confidence in its ability to maintain financial system stability. Most Tier 1 banks saw a slight decline in CAR in 2025 but remained well above the CBN's required 15% threshold.

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As at December 31, 2025, the group’s CAR was below the applicable regulatory minimum, stemming from our banking subsidiary. The group’s CAR had been restored subsequently as at March 2026 through a capital remediation plan which included improved earnings from continuing operations for Quarter 1 2026, and capital injection.