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By Chinwendu Obienyi
The Nigerian banking sector experienced significant growth, with banking stocks soaring by 9.8% month-on-month (m/m), driven by an accelerated recapitalisation drive initiated by the Central Bank of Nigeria (CBN).
The surge in banking stocks is part of a broader positive trend in the Nigerian stock market, which kicked off 2025 with a substantial gain of N1.95 trillion.
Daily Sun investigations reveal that the recapitalisation exercise, announced by the CBN on March 28, 2024, has been a key driver of investor interest in banking stocks. Under the new regulations, banks were required to meet minimum paid-up capital thresholds by March 2026, with international banks needing to maintain a minimum capital base of N500 billion, national banks N200 billion, and regional banks N50 billion.
Additionally, the performance of banking stocks was guided by year-beginning portfolio positioning, corporate actions, and expectations ahead of the full year 2024 earnings season.
The positive performance of banking stocks has contributed to overall market gains; the market capitalisation increased from N62.763 trillion at the start of 2025 to N64.709 trillion by the end of January 2025 while the NGX-All Share Index (ASI) rose 1.5% m/m to settle at 104,496.12 points. Consequently, the year-to-date (YTD) return closed at 1.5%.
The Securities and Exchange Commission (SEC) revealed as of November 2024, banks have raised about N1.7 trillion via the exercise.
Specifically, Zenith Bank announced the completion of its capital raise of N350.4 billion, which was oversubscribed 160.4%.
Likewise, GTCO Plc announced the completion of the first tranche of its equity capital raise programme (N209.4 billion), reinforcing its capacity to meet regulatory requirements and pursue growth initiatives such as footprint expansion, product enhancement, and innovation.
Similarly, Fidelity Bank’s combined N127.1 billion offering featured a public offer priced at N9.75 per share and a rights issue priced at N9.25 per share, quite attractive entry points considering the stock’s share price right now.
As of January 31, Fidelity Bank had a share price of N19.45 essentially meaning that investors in the public offer have recorded a capital appreciation of 114%. Also, for Access Holdings, its rights issue saw the issuance of 17.77 billion new shares worth N351 billion. The rights issue saw the sale of one new share for every 2 held by existing shareholders.
The rights issue share price was N19.75, however, with its share price around N26.00 as of January 31, the rights issue has returned a capital gain of 41% for existing shareholders.
FCMB Group raised about N147.5 billion in its public offer that saw it issue 15.2 billion new shares to investors at N7.30 per share. With FCMB’s share price currently at N11.05, the public offer shares have appreciated in value by a whopping 62%.
For Sterling Bank, rights issue shares were issued at N4 per share, on the basis of one new share for every four shares held. With Sterling Bank shares currently trading at N5.80, the shares have recorded capital gains of about 54%. While some dilution may occur once the shares are fully listed, the recapitalization process is strengthening bank balance sheets, enhancing their lending capacity, and positioning them for future growth.
Investors who secured shares at offer prices are set to benefit from both capital appreciation and potential dividend yields.
Reacting to the development, analysts expect the banking sector to continue driving market performance, with the ongoing recapitalization process and anticipated monetary policy easing by the CBN likely to sustain investor interest.
However, challenges such as exchange rate volatility and inflation persist, which may impact the sector’s performance in the coming months.
