Foreign Banks retain grip on Nigeria’s capital importation market

Foreign-owned banks have maintained their dominance as the primary channels for foreign capital entering Nigeria, processing nearly nine out of every 10 dollars of capital imported into the country in the first quarter of 2026, according to data from the National Bureau of Statistics (NBS).

The latest NBS Capital Importation Report shows that foreign banks among the country’s top 10 capital importation channels handled $8.97 billion of the $10.2 billion processed during the quarter, representing approximately 88 per cent of total inflows. Nigerian-owned banks accounted for the remaining $1.23 billion.

The figures reinforce a seven-year trend that has seen international banking groups dominate Nigeria’s foreign investment landscape, serving as the preferred intermediaries for offshore investors.

Standard Chartered Bank Nigeria emerged as the largest channel for foreign capital, processing $4.41 billion in inflows during the first quarter of 2026, while Stanbic IBTC followed with $2.78 billion.

Combined, the two institutions facilitated $7.19 billion, accounting for more than 70 per cent of all capital handled by the country’s leading banks during the period.

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The performance represented a significant improvement over the corresponding period in 2025.

Capital importation through Standard Chartered more than doubled from $2.1 billion in Q1 2025 to $4.41 billion in Q1 2026, representing a 110 per cent year-on-year increase.

Stanbic IBTC also recorded strong growth, with inflows rising from $1.4 billion to $2.78 billion, an increase of 98.6 per cent.

Among other international lenders, Rand Merchant Bank posted one of the strongest performances, with capital inflows increasing by 140.3 per cent from $387.32 million to $930.82 million.

By contrast, Citibank Nigeria recorded a decline, processing $782.84 million compared with $1.05 billion in the corresponding period of 2025.

Ecobank, which did not feature among the top 10 channels in the previous year, entered the rankings after facilitating $62.06 million in capital inflows.

Local Banks Trail Foreign Rivals

Among Nigerian-owned lenders, Access Bank remained the country’s largest domestic channel for foreign investment, processing $710.03 million during the quarter.

However, the figure was less than one-sixth of Standard Chartered’s total and substantially below Stanbic IBTC’s performance.

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Other local banks recorded relatively modest inflows, with First Bank processing $274.74 million, Guaranty Trust Bank (GTBank) handling $107.11 million, Zenith Bank facilitating $69.33 million, while FCMB processed $64.97 million.

Seven-Year Trend Continues

An analysis of NBS capital importation data between 2019 and 2025 indicates that foreign banks have steadily strengthened their dominance as Nigeria’s preferred gateways for international capital.

Their share of total capital processed by the annual top 10 banks stood at 80 per cent in 2019, 80.1 per cent in 2020, declined to 76.9 per cent in 2021 and 74.8 per cent in 2023 before rebounding to 80.7 per cent in 2024.

The share reached a seven-year high of 88.2 per cent in 2025, when five foreign banks processed $19.98 billion of the $22.66 billion handled by Nigeria’s top 10 capital importation channels.

The latest first-quarter figures suggest the trend has continued into 2026, with foreign institutions retaining their commanding position.

Experts Explain Foreign Banks’ Dominance

Commenting on the development, capital market analyst and lawyer Victor Odulate said international investors naturally prefer foreign banks because of longstanding global banking relationships and established trust.

According to him, many offshore fund managers route investments into Nigeria through the local subsidiaries of banks they already transact with in financial centres such as London and New York.

“The dominance of foreign banks starts with familiarity and trust. When deploying capital into Nigeria, offshore fund managers naturally route money through institutions they already use abroad, reducing counterparty risk and avoiding additional compliance procedures,” he said.

Odulate explained that many foreign-owned banks established Nigerian subsidiaries specifically to serve as sub-custody gateways for global institutional investors, while indigenous lenders have traditionally focused on domestic commercial banking and retail expansion.

He added that international banks also enjoy an advantage because of their ability to facilitate smoother foreign exchange repatriation.

“Global investors care just as much about getting money out as putting it in. Foreign-owned banks can leverage their parent companies’ offshore balance sheets and global networks to offer currency hedges and facilitate easier dollar repatriation during periods of FX scarcity,” he noted.

However, Odulate stressed that the trend should not be interpreted as a failure by Nigerian banks.

“Indigenous banks excel at commercial lending and regional trade. Capturing foreign portfolio capital is simply a specialised segment that requires stronger custody infrastructure and dedicated global investor services,” he added.