The NGX Banking Index, which tracks listed Nigerian banks, ended August 2025 within the pink, with the decline extending into early September and dipping beneath the 1,500 each day assist stage.
Beginning the 12 months on a powerful notice, the index opened at 1,084.5 and climbed greater than 48% to peak above 1,610 by July, as banking shares rallied.
Nevertheless, the 5% drop in August created a dip and weighed on the broader All-Share Index, which barely closed within the inexperienced, up 0.31%.
Whereas the NGX Banking Index doesn’t home each listed bank, it comprises 10 main gamers whose measurement and capitalization enable them to affect each the sub-index and the broader market.
On the middle of this affect are the FUGAZ banks: FirstHoldCo, UBA, GTCO, Entry Holdings, and Zenith.
- These tier-one lenders aren’t solely probably the most liquid within the sector but in addition probably the most intently watched, with their company actions usually setting the tone for the market.
To date, solely FirstHoldCo has launched its Q2 outcomes, whereas traders await reviews from the others with rising anticipation.
Analysts consider these releases might spark recent sentiment, lifting the index from the 1,500–1,550 zone and reigniting momentum within the sector and throughout the market.
Forbearance
Samuel Oyekanmi, Analysis and Perception Lead at Norrenberger Monetary Group, believes that extra banks leaving the CBN’s forbearance checklist might set off an upward rally within the sector.
“For a short-term burst that might push the index previous the 1,600-resistance zone, information of banks exiting CBN’s publicity is vital,” he defined.
He added that banks free of forbearance could be higher positioned to pay dividends, an element that usually drives confidence within the Nigerian market.
“Dividend sentiment drives the market right here. As soon as banks announce they’re off that checklist, it is going to possible regular the sector.”
- Forbearance, usually utilized by central banks during times of financial stress such because the COVID-19 pandemic, permits lenders flexibility in mortgage classification and reporting.
In a round issued in mid-June 2025, the Central Bank of Nigeria directed all banks nonetheless below regulatory forbearance to droop dividend funds, defer bonuses, and halt investments in international subsidiaries, signaling that with the pandemic now over, banks would not proceed to take pleasure in such aid.
Estimates from Renaissance Capital present that Zenith Bank, First Bank, and Access Bank carry the very best publicity, whereas tier-two lenders like Constancy and FCMB are additionally affected.
In contrast, GTCO and Stanbic IBTC don’t have any publicity, having already cleaned up their mortgage books.
The report additionally famous that defaulting banks are unlikely to renew dividend funds till 2028. Within the meantime, any payouts would come from non-banking subsidiaries of the affected teams.
Regardless of these constraints, Oyekanmi identified that the market has stayed largely calm.
He famous that the upcoming half-year outcomes of the remaining FUGAZ banks may very well be the true catalyst; if the numbers are sturdy, they could raise the index out of its present dip.
H2 efficiency
In keeping with Oghentega Idogun, an analyst at MetaMacro, the second-quarter outcomes of the remaining banks—other than FirstHold—might be essential in shaping market sentiment for the remainder of the 12 months.
“Bank efficiency is at all times a key driver. As you already know, the CBN has but to approve the second-quarter numbers for some banks,” he defined. “If these outcomes end up sturdy, they might enhance investor confidence.”
On the 1,500–1,600 each day assist zone, Idogun was optimistic:
“A break above 1,600 is feasible if efficiency is available in proper.”
He additionally outlined three attainable eventualities:
- Stronger-than-expected outcomes: FUGAZ shares rally, lifting the broader market.
- In-line outcomes: Softer, extra modest strikes.
- Weaker-than-expected outcomes: A quick sell-off.
“FUGAZ shares are market movers,” he pressured.
A CardinalStone analyst, who most well-liked to not be named, shared an identical view.
In his phrases, “We anticipate a mixture of good earnings and interim dividends to drive the sector ahead, supplied outcomes meet expectations.”
With banks appearing as market drivers, sentiment from sturdy earnings, dividend declarations, and extra establishments exiting forbearance may very well be sufficient to push the sector decisively above the 1,600-mark.
