Kayode Tokede
The confidence of investors in Nigeria’s banking sector has continued to grow as the combined market capitalisation of 12 listed Deposit Money Banks (DMBs) surged to N25.1 trillion between December 31, 2025, and May 2026, driven by the Central Bank of Nigeria’s (CBN) recapitalisation programme, robust earnings performance and sustained demand from both domestic and foreign investors.
The remarkable rally, which has transformed banking stocks into some of the most sought-after assets on the Nigerian Exchange Limited (NGX), reflected growing market confidence in the sector’s resilience, profitability, and long-term growth prospects.
Data compiled by THISDAY showed that the combined market value of the 12 banks climbed by N9 trillion, or 55.8 per cent, between December 31, 2025, and May 29, 2026, from N16.12 trillion at the close of last year to N25.1 trillion.
The impressive performance comes as lenders continue to strengthen their capital bases in response to the CBN’s ongoing recapitalisation exercise, which has seen banks raise trillions of naira in fresh equity from investors eager to tap into the sector’s growth story.
At the centre of the rally is Zenith Bank Plc, which has emerged as the most valuable banking stock on the Exchange. Its share price appreciated by 112 percent year-to-date, closing in May at N131.10 per share and lifting its market capitalisation to N5.38 trillion, up from N2.54 trillion at the end of 2025.
Closely behind is Guaranty Trust Holding Company Plc (GTCO), whose market value rose from N3.3 trillion to N5.01 trillion over the same period, cementing its position as one of the market’s most valuable financial institutions.
Analysts attributed the strong valuation growth recorded by both banks to their consistent profitability, strong capital positions, attractive dividend policies, and ability to deliver superior returns to shareholders.
For the 2025 financial year, Zenith Bank rewarded shareholders with a total dividend of N12.76 per share, while GTCO paid N10 per share, reinforcing their reputation as dependable dividend-paying stocks and strengthening investor appetite for their shares.
The earnings momentum has also remained strong.
Zenith Bank reported a profit before tax of N360.92 billion in the first quarter of 2026, representing a three per cent increase over the N350.82 billion posted in the corresponding period of 2025.
GTCO, on its part, delivered a profit before tax of N302.9 billion, supported by strong growth in its core earnings lines. Interest income rose by 17.5 per cent year-on-year, while fee income increased by 7.1 per cent, reflecting the group’s ability to sustain earnings growth despite a challenging operating environment.
The sector-wide rally has not been limited to the industry’s traditional heavyweights.
First Holdco’s market value climbed to N3.1 trillion, while Stanbic IBTC Holdings’ market capitalisation rose sharply from N1.59 trillion at the end of 2025 to N2.69 trillion as of May 29, 2026.
Similarly, United Bank for Africa (UBA), Access Holdings, Fidelity Bank, Wema Bank and Ecobank Transnational Incorporated (ETI) all crossed or approached the N1 trillion market capitalisation threshold, underscoring the broad-based nature of investor interest in banking equities.
UBA ended May with a market value of N1.97 trillion, while ETI followed closely at N1.7 trillion.
Fidelity Bank and Wema Bank each attained market valuations of about N1.34 trillion, while Access Holdings closed the month at approximately N1.3 trillion.
Other financial institutions also recorded notable gains. Sterling Financial Holdings Company Plc ended May with a market capitalisation of N411.7 billion, while FCMB Group’s valuation stood at N771.67 billion.
Market operators believe the sector’s strong performance reflects investors’ positive assessment of ongoing reforms in the banking industry, particularly the recapitalisation programme, which is expected to create stronger, more resilient institutions capable of supporting Nigeria’s economic ambitions.
They also pointed to the banks’ impressive earnings trajectory, healthy balance sheets, and attractive dividend yields as key factors sustaining investor demand.
Vice President of Highcap Securities Limited, Mr. David Adonri, said banking stocks were likely to remain attractive to investors because of their ability to generate strong earnings and deliver consistent returns through dividend payments.
According to him, the sector has demonstrated remarkable resilience despite domestic and global economic headwinds and remains critical to financing economic growth and supporting business activities nationwide.
Analysts further noted that with recapitalisation gathering momentum and the broader economy showing signs of recovery, banking stocks could continue to outperform the wider market in the months ahead, particularly if lenders sustain their earnings growth and maintain shareholder-friendly dividend policies.
For many investors, the banking sector has become a strategic play on Nigeria’s economic recovery, offering a combination of capital appreciation, income generation, and long-term value creation that few other sectors can currently match.
