The Nigerian banking sector is set for sustained improved performance until 2026.
With the March 2026 deadline for recapitalization of the Central Bank of Nigeria (CBN) now visible in the rearview mirror, analysts have highlighted a “winner list” of strong institutions ready to take advantage of the high yield environment and increased lending capacity.
Key drivers of the sector's strong outlook include the completion of major capital raises, a steepening yield curve following MPR's peak of 27.5 per cent and a shift towards non-interest income.
While there were some weaknesses during the 2024-2025 rights issue, the resulting stronger balance sheet is expected to lead to higher dividend payouts in the 2026 financial year.
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Nigeria’s biggest banks have largely cleared the recapitalization hurdle, months ahead of the March 31, 2026 deadline, deploying a mix of speed, scale and strategy to meet the Central Bank of Nigeria’s (CBN) stringent capital limits.
According to an analyst at Corderos, the banking sector (earnings per share are projected to grow +19.1 per cent YoY in 2026) is set for earnings growth, supported by increased capital buffers and a healthy credit cycle.
Furthermore, AfrinInvest analysts said the banking sector is one of the winners in some pre-election periods, supported by strong earnings expectations and investors' preference for liquid, systemically important tickers.
He also expects the sector to outperform by 32 per cent by year-end on the back of strong interest income, better asset yields and balance sheet expansion following recapitalization efforts.
UBA, Access, GTB, Zenith and Stanbic IBTC Bank are selected stocks in Afrinvest Banking Value, while the banks listed above along with Fidelity and FCMB make up their High Dividend Yield Index.
Based on current market data and analyst recommendations, here are the top Nigerian bank stocks to watch:
Access Holdings (AccessSCORP)
Access Corp has been highlighted as the primary beneficiary of the new capital arrangement. Having successfully met its N500 billion requirement early on, the bank is now focusing on its Pan-African scale-up strategy.
CardinalStone estimates a 12-month target price of 101.4 per cent, a potential percentage upside to the stock price and a dividend yield of 11.4 per cent by the end of 2026.
Analysts view ACCESSSCORP as the most undervalued tier-1 player relative to its asset base. Its expansion into pension and fintech subsidiaries provides a diversified revenue stream.
Zenith Bank (ZenithBank)
Zenith Bank remains a “preferred choice” for income-focused portfolios. The bank, known for its best-in-class efficiency, enters 2026 with significantly higher liquidity buffers.
For CardinalStone, the stock price has a potential upside of 58.3 percent by the end of the year and a dividend yield of 9.5 percent.
Zenith is expected to maintain its position as the dividend king. With the pressure for recapitalization lifted, the bank is expected to return a substantial portion of its retained earnings to shareholders, supported by a 25 per cent growth in interest income.
Also read: Five surefire stocks to invest in right now for dividend income
United Bank for Africa (UBA)
UBA has been cited as a “top pick” for investors seeking geographic diversification. Its operations in 20 African countries act as a natural hedge, providing high quality foreign exchange earnings.
CardinalStone said investors can expect a 48.6 percent gain over the next 12 months, along with a 7.9 percent dividend yield.
Following its successful rights issue, UBA has the highest capital adequacy ratio in the sector. Investors are particularly optimistic about its digital banking growth, which now accounts for a significant portion of its fee-based income.
Guaranty Trust Holding Company (GTCO)
GTCOs are being viewed positively as the regulatory burden is reduced and the “hubri” ecosystem of banks is gaining momentum.
With a 9.3 percent dividend yield and projected 41.8 percent price growth over the next year, it represents a strong total return opportunity as estimated by CardinalStone.
It was also Cordos analyst's top pick for 2026 in the banking sector, with a target price of N115.19 per share.
We expect a re-rating in year-end 2026 due to consistent return on equity performance, healthy net interest income and continued leadership in cost management.
“Our positive outlook on GTCO stems from the group's improved earnings
Quality, a clean loan book, which is expected to help in loan formation
Strengthening basic income, continued leadership in cost management, and
Undisputed balance sheet strength, which supports balance sheet expansion,” said an equity analyst at Corderos.
Despite high competition, GTCO has maintained the industry's lowest cost-to-income ratio. Analysts believe the bank's lean operating model will allow it to deliver better returns on equity (ROE) compared to peers in the post-recapitalization market.
Also read: Investors eye earnings season as shares surpass N100trn valuation
Fidelity Bank (FidelityBK)
Fidelity Bank is one of the former Tier-2 lenders that has successfully used the recapitalization window to join the Tier-1 conversation.
The stock offers a significant 12-month price target of more than 31.5 percent, complemented by a strong 7.9 percent dividend yield.
Management's focus on specialized commercial verticals and SME lending has paid off. The bank's recent capital infusion is expected to grow its loan book by 15-20 per cent by 2026.
