Since then the capital base of the banks has eroded so much so that the smallest bank of South Africa is bigger than all the Banks of Nigeria put together. Nigerian banks seem like giants locally but on a global stage they are mere minions, even on an African level they are small banks. 

Even if you look at the services of Nigerian banks, you will find that they are low level at best. There are frequent network outages, ATM's often do not work or run out of currency notes, there are commissions attached to basic transactions like a transfer or buying airtime credit. If you study these banks closely you will notice there there is very little organic growth in terms of real banking services i.e. borrowing and deposits. 

While the big banks like GTCO , ZENITHBANK & FBNH will be loving the prospects of taking over some smaller banks, the smaller bank CEO's will be making plans on how they are going to raise capital to satisfy the CBN's upcoming requirements. 

We came up with the following list of Bank that could be in need to more capital on assumptions that CBN will raise the minimum capital requirement to $500 million which at the exchange rate of 900 would be equivalent of N 450 billion. 

On those assumptions, the bank which would need to raise capital would be UNITYBNK , FIDELITYBK , STERLINGNG , WEMABANK , JAIZBANK , STANBIC while those that would be above that limit but not by more than 50% would include ACCESSCORP , UBA & Togo based ETI so we can expect some moves soon. 

Investors in these banks are already feeling a bit of anxiety regarding how to handle this upcoming capital raise. Do they sell now and wait for time to pass and invest elsewhere or continue to remain invested? 

The prospect of re-capitalization is a welcome one but we feel CBN has to put some measures in place this time to check the erosion of the capital by most of these banks. They have failed to return capital in a meaningful way to their shareholders and have indulged in wasteful expenses on foreign trips, expensive SUV's and other high expenses. 

There are no reasons for banks to lose capital unless they are managed in a very bad way and CBN should take some steps to address that reality. The payout ratio of Nigerian banks is very low compared to other banks in the world. They treat their shareholders like second class citizens. 

As a result most Nigerians do not invest in the stock market. The return on investment is paltry and the dividend yields are well below the fixed income yields. These are some basics that Nigerian bank CEO's just do not understand as they continue to buy themselves the latest SUV's, watches, expensive wines, foods and foreign trips at the best hotels. Meanwhile Bank CEO's of much much bigger banks live a more subtle lifestyle some even go to their offices on bicycles in Europe to get some exercise. Meanwhile those CEO's pay their shareholders a high dividend while Nigerian CEO's pay in kobo's where the payout ratio's do not exceed 20% some don't pay anything at all. 

We hope the new CBN Governor will take these issues into consideration as well and not just allow these banks to raise capital and continue to smoke their shareholders wealth.