Dr. Abiola Salami

Nigeria also needs banks whose strength helps other parts of the economy become stronger.

It Has Been a Significant Period for Nigerian Banking
The sector has undergone substantial recapitalisation. Digital-payment infrastructure continues to expand. Financial institutions remain an important contributor to economic activity.

Nigeria’s finance and insurance sector recorded real year-on-year growth of 9.29 per cent in the second quarter of 2026 and contributed 3.37 per cent to real GDP. Financial institutions accounted for 87.22 per cent of the sector’s real activity.

At the same time, financial institutions’ real output was approximately ₦1.57 trillion in Q2 2026, down from about ₦1.75 trillion in the preceding quarter.

This is an important reminder that neither sector strength or national impact can be understood through a single number. That is why banking now requires a broader performance conversation.

What Should Nigeria Get From Stronger Banks?
This month, the Performance Leadership Brief™ has asked one central question:Nigerian Banks Have Recapitalized. Can the Banks Now Recapitalize Nigeria?
That question is deliberately provocative.

It does not suggest that banks alone can fix the Nigerian economy; they cannot. To fix the Nigerian economy, fiscal policy, monetary policy, infrastructure, security, regulation, education, governance, enterprise quality and global conditions matter; but banking matters too.

Financial institutions sit at the intersection of savings, capital, investment, trade, payments and enterprise. Their performance has consequences beyond their own organisations.

The Conversion Chain
Perhaps the post-recapitalisation era should be judged through a simple chain:
CAPITAL → CAPABILITY → CREDIT → ENTERPRISE → PRODUCTIVITY → NATIONAL PERFORMANCE

Capital gives the institution strength. Capability determines what leadership can do with that strength. Credit moves resources toward economic opportunity. Enterprise converts those resources into activity.

Productivity creates more output from available resources.And national performance emerges when this conversion happens at sufficient scale.

The weakness of many performance systems is that we celebrate the first stage and assume the rest.

We celebrate expenditure instead of outcomes, training instead of capability, policy instead of implementation, technology instead of user experience, capital instead of economic conversion. But inputs and outcomes are not the same thing.

The Banking Performance Test Must Expand
Imagine evaluating a major Nigerian bank. Naturally, we would examine profitability, return on equity, capital adequacy, asset quality, liquidity, cost efficiency and perhaps shareholder returns. All of them are legitimate indicators of institutional performance.

But for an economy such as Nigeria’s, we should increasingly ask another layer of questions. How effectively is the institution financing productive businesses? What is the quality of its SME franchise? How much capability does it possess in sectors Nigeria needs to grow? How effectively does it support exports? How reliable are its payment channels? How effectively does it resolve complaints? How well does it protect customers? What kinds of businesses has its financing helped move from small to substantial? How much economic activity sits downstream of its capital?
These questions do not replace traditional banking metrics. They extend them.

The Difference Between a Successful Bank and a Significant Bank
A successful bank creates value for itself and its stakeholders. A significant bank does that and becomes part of the infrastructure through which others create value.

It helps businesses move. It allows households to transact confidently. It helps investors deploy capital. It enables trade. It finances productive assets. It supports innovation. It helps credible businesses cross the gap between opportunity and scale.

The strongest institutions in an economy should create positive performance effects beyond their organisational boundaries. That is what makes them institutions rather than merely successful companies.

But Banks Cannot Do This Alone
Nigeria cannot demand dramatically deeper productive lending while ignoring the environment within which lending decisions are made.

The IMF’s 2026 assessment noted that banks’ holdings of government securities, high reserve requirements and structural constraints were limiting private-sector credit intermediation.

The CBN’s September decision left the Cash Reserve Requirement for deposit money banks at 45 per cent and reset the Monetary Policy Rate at 23 per cent.

Therefore, the leadership challenge extends beyond bank boards.

Policymakers must continue creating conditions in which productive private-sector lending becomes more viable. Businesses must improve governance, records and bankability. Credit infrastructure must deepen.

The legal system must support contract enforcement. Financial institutions must innovate in risk assessment. Capital markets must provide alternatives where bank lending is not the right instrument.

This is why Performance Leadership is ultimately about systems. Sustainable outcomes rarely come from one actor operating in isolation.

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Dr. Abiola Salami is a World-Class Performance Strategist and the developer of Performance Leadership™. His work focuses on enabling leaders and organisations close the gap between investment, capability, execution and measurable outcomes.