🏦2025 Bank's in Review

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Today’s Edition

After spending 2025 shoring up capital and tightening risk controls, African banks are entering 2026 with the strongest balance sheets in years. Nigeria's 21 banks met new recapitalisation requirements topping ₦500 billion ($352M) for international licences. Kenya is forcing consolidation through capital thresholds reaching KES 10 billion by 2029. South Africa opened its payment system to fintechs. The defensive phase is over. Now banks need to prove they can actually deploy all that capital … without blowing up their loan books. Onto today’s edition.

THE WIRE

African banks shift to growth mode - Nigeria, Kenya, South Africa banks exit consolidation phase with stronger capital buffers. Nigeria's 21 banks met recapitalisation requirements, Kenya raises minimum capital to KES 5B, SA opens payment rails.

Tether hoards $24B in gold - Crypto giant now holds 140 tonnes in Swiss nuclear bunker, buying 2 tonnes weekly. Bought 70+ tonnes in 2025 - more than every central bank except Poland.

Paystack gets banking licence - Stripe-owned fintech acquires Ladder MFB, plans working capital loans for Nigeria's 300,000 merchant customers before expanding to consumers.

Musk's $1.25T merger closes - SpaceX acquires xAI ahead of mid-2026 IPO. Deal values SpaceX at $1T, xAI at $250B. Critics call it an xAI bailout disguised as innovation.

Pepkor fintech revenue jumps 25% - Pep owner's financial services hit R4.8B before planned bank launch in 2026. FoneYam the phone device rental doubles to 2.3M active customers.

LEAD TRANSACTIONS

African banks ready to scale after capital blitz-if NPLs (Non-Performing Loans) cooperate

African banks spent 2025 building muscle. Nigeria's 21 banks met new minimum capital requirements ranging from ₦10 billion to ₦500 billion ($352M) depending on licence type. Kenya raised core capital thresholds to KES 5 billion ($38.7M) by end-2026, climbing to KES 10 billion ($77.5M) by 2029. South Africa opened its National Payments System to non-banks through the NPS Bill. The consolidation phase is ending. Banks now enter 2026 with stronger balance sheets, wider digital reach, and room to scale lending to infrastructure, energy, and manufacturing-the sectors central banks see as critical to economic expansion.

Why it matters: Stronger capital buffers give banks capacity to underwrite big-ticket loans while absorbing shocks from elevated non-performing loans and currency volatility.

State of play: Nigeria's banking industry NPL ratio stood at 7% in 2025, above the 5% prudential threshold, reflecting withdrawal of COVID-era regulatory shadow. Kenya's Central Bank is forcing smaller Tier 3 lenders to either raise fresh capital, find merger partners, or exit the market. Why? Well, it’s easier to monitor and enforce regulation for a few big banks than 10 smaller ones. Eight banks-including Premier, Access Kenya, UBA Kenya, ABC, M-Oriental, Consolidated, and Development Bank of Kenya-failed to meet the December KES 3 billion threshold. And finally, South Africa reviewed the prime lending rate structure that prices R6.2 trillion ($378B) of credit, reducing the 350 basis point spread above the repo rate that's been fixed since 2001.

Catch up: The Central Bank of Nigeria triggered the sector's most ambitious recapitalisation in two decades, requiring international banks to raise minimum paid-up capital to $352M, national banks to $141M, and regional banks to $35M. The expanded capital base gives banks greater capacity for infrastructure lending while strengthening solvency and competitiveness. Kenya's consolidation drive mirrors regional peers, with large banks like KCB Group, Equity Group, and NCBA (the bank SA’s Nedbank could acquire) able to meet requirements while smaller lenders scramble. Nigerian lenders Access Bank and Zenith view Kenya as a strategic East African base. South Africa's SARB approved the NPS Bill in 2025, allowing fintechs like Stitch, Ozow, and Yoco, plus mobile operators Vodacom and MTN, to settle transactions directly without traditional bank sponsorship.

Zoom in: Nigeria's CBN is signalling an ATM comeback after years of heavy reliance on Point-of-Sale terminals. Banks must deploy one ATM per 5,000 active cards, achieving 30% compliance by 2026, 60% by 2027, and full compliance by 2028. Kenya's CBK approved risk-based pricing models in 2025, ending one-size-fits-all interest rates. Basically, loan prices now depend on transaction history, bill payments, business activity, and patterns over time. Off to a rocky start, South Africa's PayShap instant payments surpassed 44 million monthly transactions by August 2025, signalling a move toward real-time settlement as the default expectation. Kenyan banks are thinking regionally, with a growing share of profits from DRC, Uganda, Rwanda, and Tanzania. KCB, Equity, and Co-operative Bank are eyeing Ethiopia expansion.

So what?: So, the 2026 test is execution. Banks have the capital. The question is whether they can deploy it productively while managing risks that remain elevated. Currency depreciation could reprice FX exposures (foreign debt) and tighten liquidity (how much free cash they have on hand), particularly for banks with significant foreign-denominated obligations. Rising NPLs could pressure earnings and constrain credit extension if borrowers struggle under elevated interest rates. Nigerian banks face a $32 billion SME financing gap, but lending at scale requires deposits, control over settlement flows, and stricter, disciplined underwriting-not just bigger balance sheets. Kenya's smaller banks face a fork: raise capital or find buyers which some are already doing. South Africa's prime rate review could reshape household debt burdens and SME access, but only if reforms protect bank margins. The regulatory foundation is in place. Banks built the capital buffers. Now comes the hard part: growing responsibly in markets where macro volatility remains the base case.

TRADING FLOOR

Standard Bank goes cashless - Africa's largest lender accelerates shift, converting more branches in 2026 as cash usage declines. Standard Bank already operates 62 cashless branches, up from 5 in 2020. Branch floorspace down 30% since 2020 while adding 16 new locations. ABSA is also going cashless this year.

Pepkor's fintech proves model - Financial services revenue up 47.6% to R2.4B, fintech segment up 25.4% to R4.8B. Credit sales now 18% of total group sales, up from 16%. Bank launch planned 2026 with proven infrastructure.

Tether's orbital ambitions - CEO Paolo Ardoino says the company aims to become "one of the biggest gold central banks in the world." Plans to continue buying at current pace.

Musk empire reshuffles - Combined SpaceX-xAI valued at $1.25T, just 26% below Tesla's $1.58T market cap. Tesla's $2B January investment in xAI now becomes indirect SpaceX stake. Analysts call it "SolarCity bailout 2.0."

Kenya IPO drought ends - First Nairobi Securities Exchange listing in 11 years signals renewed confidence. Nigerian banks Access and Zenith view Kenya as strategic base for East and Central Africa expansion.

SACCOs go digital - SACCO’s is Kenya's Savings and Credit Cooperative Organizations. Stima Sacco, Mwalimu Sacco, and Kenya Police Sacco now fully digital with instant mobile loans and real-time savings. A bid to appeal to the younger generation. Capital gap between Tier 2 banks and large SACCOs is narrowing.

+ THIS

1962: The Blueprint for the African Development Bank (AfDB)

In early February 1962, a crucial meeting of the Economic Commission for Africa (ECA) took place in Addis Ababa, Ethiopia.

On this day, delegates were finalizing the proposal for a truly Pan-African financial institution. The goal was to create a bank that would prioritize African development, funded by African resources for the benefit of African people. For us, by us. This led directly to the formal establishment of the African Development Bank in 1964. Today, the AfDB is a powerhouse in funding tech infrastructure across the continent, from high-speed fiber cables to renewable energy grids that power the servers of Africa's massive "Silicon Savannah” and more.

As always, thanks for reading. Hit Reply and let me know what you’d like to see more of and less of in upcoming Banking Briefs.