Five major Nigerian banks have committed to investing approximately N222 billion ($1.20 billion) in technology and cybersecurity as they work to meet new capital requirements set by the Central Bank of Nigeria (CBN). The banks—Guaranty Trust Holding Company (GTCO), Access Holdings, Zenith Bank Plc, Fidelity Bank, and FCMB Group—have laid out these plans in their capital-raising documents.
This move comes after the CBN announced updated capital requirements for banks operating in the country. Under the new rules, commercial banks with international authorization must increase their capital base to N500 billion, while national banks need to reach N200 billion. Regional banks are expected to maintain a minimum capital floor of N50 billion. The CBN has given these institutions a two-year deadline to meet these targets, providing options such as raising additional capital, pursuing mergers and acquisitions, or upgrading or downgrading their licenses. According to a report by PwC, there’s a significant capital shortfall of about N4.2 trillion across all bank categories, with some banks needing to raise as much as 35% to 50% of their new capital requirements.
Among the banks, GTCO has allocated the largest budget for technology investment. GTCO plans to raise N400.50 billion by offering nine billion ordinary shares at N44.50 per share. Of the net proceeds of N392.49 billion, about 26.6% (N98.50 billion) will be used to upgrade technology infrastructure. This includes investments in core banking applications, hardware infrastructure, network architecture, and data center optimization. Additionally, GTCO has earmarked around N15 billion for information security, fraud prevention, and detection software.
Access Holdings is also making significant investments in technology. The company plans to spend N68.62 billion on IT infrastructure, representing 20% of the N343.09 billion it aims to raise through its rights offer. This includes N41.17 billion for network infrastructure and N27.48 billion for enhancing cybersecurity capabilities. The remaining proceeds will support local and international business expansion.
Zenith Bank Plc has budgeted around N19.85 billion for technology upgrades, equivalent to 20% of the net proceeds from its capital raise. The bank’s technology spending will focus on various areas, including N8.93 billion on computer hardware and servers, N3.97 billion each on software licenses and network infrastructure upgrades, and N2.98 billion on cybersecurity architecture and software.
Fidelity Bank, having already closed its offering, plans to invest N19.01 billion in IT infrastructure, about 20% of its N127 billion net proceeds. The bank will allocate N9.03 billion towards cybersecurity capabilities, N7.60 billion for software licenses and hardware, and N2.38 billion for additional network infrastructure investments.
FCMB Group, the fifth bank reviewed, has set aside N16.22 billion for technology investments, representing 15% of its net proceeds. The bank will spend N11 billion on upgrading its IT infrastructure and N5.23 billion on bolstering its cybersecurity measures.
These banks are prioritizing cybersecurity amidst a surge in cyberattacks targeting their technology infrastructure, leading to financial losses and legal challenges. Recently, GTB reported an attempted hack on its website, which temporarily disrupted online services. The bank assured its customers that the hacking attempt was unsuccessful and that no customer data was compromised.
The International Monetary Fund’s Global Financial Stability Report from April highlighted the growing risk of extreme losses due to cyber incidents, which could potentially lead to financial instability for companies. The report noted that such losses have more than quadrupled since 2017, reaching $2.5 billion, with indirect costs such as reputational damage and security upgrades being significantly higher.
In addition to the planned technology investments, the banks will collectively spend about N22.94 billion on the costs associated with their capital-raising efforts, including legal fees, marketing, and other expenses.
