Nigerian Banks Rally N11T but Trade Below African Peers: Buying Opportunity?
Nigerian banking stocks rallied strongly in 2026, adding N11.17 trillion in market value in under nine months. The NGX Banking Index gained 67.96% year-to-date as of September 14, outperforming the broader NGX All-Share Index's 56.35% rise. Nairametrics data shows the 12 banks' combined value increased from N16.44 trillion at end-December 2025 to N27.61 trillion currently.
Despite the rally, sector valuations remain modest: average price-to-earnings ratio rose to 5.83x (from 4.38x) and price-to-book to 1.26x (from 0.86x). Several banks trade below net asset value, with Access Holdings and ETI at significant discounts to book value. FirstHoldCo recorded the strongest gain at 194.4% year-to-date.
Nigerian banks still trade at lower multiples than peers in Kenya, South Africa, Ghana and Tanzania. Only Zenith Bank and FirstHoldCo exceed N5 trillion market capitalization, with FirstHoldCo as Nigeria's sole billion-dollar mega-cap bank. GTCO is valued at ~N4.7 trillion, Stanbic IBTC at ~N2.4 trillion, while Access Holdings (~N1.5T), UBA (~N1.9T), Fidelity Bank (~N1.26T), Wema Bank (~N1.1T) and ETI (~N1.2T) round out the sector.
Analysts point to CBN recapitalization completion, attractive dividend yields and stronger earnings as sustaining demand, but question whether post-2023 foreign-exchange reform profits can be maintained through core banking activities. With foreign investor participation still below historical levels, does this valuation gap present a buying opportunity or signal concerns about earnings quality?