United Bank for Africa (UBA), Zenith Bank and Entry Corp are projected to ship the strongest risk-adjusted returns amongst Tier-1 lenders in 2026, pushed by capital appreciation and dividend energy.
That is in keeping with analysts at CardinalStone Analysis of their newest “CardinalStone Banking Technique Report,” revealed on Tuesday, February 10, 2026.
The report outlines projected whole returns throughout main Nigerian banks, highlighting earnings restoration, valuation gaps and enhancing stability sheets as key drivers of efficiency, whereas additionally figuring out underperformers inside each Tier-1 and Tier-2 segments.
What the info is saying:
CardinalStone analysts undertaking whole returns of 48.0% for UBA and 40.6% for Zenith Bank over the following yr. These returns are anticipated to be pushed largely by capital appreciation averaging 36.6%, alongside dividend yields of about 7.7%.
- Entry Holdings is projected to ship a one-year whole return of 92.3%, representing the most important upside potential amongst main lenders.
- Zenith Bank’s earnings per share are forecast to rise from N26.82 in FY2025 to N38.70 in FY2026, supported by the regularisation of mortgage forbearance and improved profitability.
- Entry Corp presently trades at a price-to-book ratio of 0.4x, considerably beneath the EMEA peer common of 1.3x, regardless of posting a return on fairness of 17.4%.
- Analysts undertaking unfavorable capital returns of three.5% for Ecobank Transnational Included (ETI) and 1.6% for Stanbic IBTC.
The analysts anticipate cleaner stability sheets, restricted mortgage impairments and renewed credit score progress to drive increased curiosity earnings throughout the sector in 2026.
Backstory
Nigerian banking shares recorded sturdy efficiency in 2025 regardless of preliminary considerations surrounding the Central Bank of Nigeria’s exit from regulatory forbearance. Robust net-interest margins, supported by enhancing macroeconomic situations, helped cushion the sector and maintain earnings momentum.
- The decision of legacy drawback belongings and regularisation of restructured loans have strengthened stability sheets throughout main banks.
- A number of lenders undertook capital elevating initiatives in 2025 to fulfill regulatory necessities and enhance lending capability.
- Dividend insurance policies remained a key attraction for buyers, notably in an surroundings of potential tax modifications that favour yield-generating shares.
This broader clean-up cycle has laid the muse for improved earnings visibility and stronger credit score growth heading into 2026.
Extra Insights
Entry Corp’s valuation low cost stays a central theme within the report, with analysts attributing its low price-to-book ratio to dividend considerations and profitability gaps relative to home Tier-1 friends. Nevertheless, the group’s shift from acquisition-led growth to consolidation is predicted to enhance asset yields and operational effectivity.
- Analysts undertaking a dividend yield of 10.5% for Entry Corp as earnings effectivity improves.
- GTCO is predicted to profit from renewed mortgage progress following the decision of legacy drawback belongings.
- GTCO’s projected payout ratios stand at 32.5% in FY2025 and 30.0% in FY2026, reflecting its constant dividend tradition.
- FirstHoldCo recorded impairments of N748.1 billion in FY2025, which weighed on earnings however cleared the trail for restoration.
Whereas FirstHoldCo is predicted to see softer impairments and stronger income progress in FY2026, earnings per share could also be diluted by new shares issued throughout latest capital elevating, with dividend payout projected at a conservative 10%.
What you need to know
Analysts anticipate continued stability sheet restore throughout the banking business to maintain actual credit score progress and earnings growth by 2026. Enhancing macroeconomic situations and stronger institutional participation are additionally projected to help valuation re-rating for main lenders.
- FCMB Group and Fidelity Bank are the popular Tier-2 picks as a result of resilient margins and improved funding buildings.
- FCMB’s latest capital injection and compensation of high-cost liabilities are anticipated to strengthen margins in a extra accommodative charge surroundings.
- Fidelity Bank’s asset yield, estimated at about 18.5% in Q3 2025, continues to help earnings momentum.
- ETI’s pause in dividend funds and Stanbic IBTC’s projected dividend yield of 5.1% underpin their weaker relative outlook.
Total, analysts preserve a constructive stance on Nigerian banking equities, positioning Tier-1 lenders particularly as key drivers of fairness market efficiency in 2026, supported by a mix of dividend earnings and capital features.