United Bank for Africa (UBA) and Zenith Bank are projected to deliver the strongest risk-adjusted returns among Tier-1 lenders in 2026, driven by capital appreciation and dividend income, according to CardinalStone Research.
In its “CardinalStone Banking Strategy Report” published on February 10, the firm projected total returns of 48.0 percent for UBA and 40.6 percent for Zenith Bank over the next year.
The returns are expected to be supported by average capital appreciation of 36.6 percent and dividend yields of about 7.7 percent.
Zenith Bank’s earnings per share are forecast to increase from N26.82 in the 2025 financial year to N38.70 in 2026, following the regularisation of loan forbearance and improved profitability.
Access Corp is projected to post a one-year total return of 92.3 percent, representing the highest upside among major lenders.
The company trades at a price-to-book ratio of 0.4x, which is below the EMEA peer average of 1.3x, despite a return on equity of 17.4 percent.
Analysts project a dividend yield of 10.5 percent for the group as earnings efficiency improves.
CardinalStone expects cleaner balance sheets, limited loan impairments and renewed credit growth to drive higher interest income across the sector in 2026.
Nigerian banking stocks recorded gains in 2025 despite concerns over the Central Bank of Nigeria’s exit from regulatory forbearance.
Net interest margins and macroeconomic conditions supported earnings during the period.
The report noted that the resolution of legacy assets and the regularisation of restructured loans strengthened balance sheets across leading banks.
Several lenders also raised capital in 2025 to meet regulatory requirements and expand lending capacity.
GTCO is expected to benefit from renewed loan growth following the resolution of legacy assets.
Its projected payout ratios are 32.5 percent in 2025 and 30.0 per cent in 2026.
FirstHoldCo recorded impairments of N748.1 billion in 2025, affecting earnings.
While impairments are projected to moderate in 2026 alongside revenue growth, earnings per share may be diluted by shares issued during recent capital raising.
Dividend payout is projected at 10 per cent.
Analysts project negative capital returns of 3.5 percent for Ecobank Transnational Incorporated and 1.6 percent for Stanbic IBTC.
ETI’s pause in dividend payments and Stanbic IBTC’s projected dividend yield of 5.1 percent were cited as factors affecting their outlook.
Among Tier-2 lenders, FCMB Group and Fidelity Bank are preferred picks.
FCMB’s capital injection and repayment of high-cost liabilities are expected to support margins in a lower rate environment.
Fidelity Bank’s asset yield, estimated at about 18.5 percent in the third quarter of 2025, is projected to sustain earnings.
CardinalStone maintains a positive outlook on Nigerian banking equities, with Tier-1 lenders positioned to drive equity market performance in 2026 through dividend income and capital gains.
