Nigerian banks dominate the NGX with N16.28 trillion in market cap, strong dividends, and heavy daily trading, making them attractive for both income and growth investors.
The banking sector is often described as the heartbeat of every economy because it provides the backbone for financial intermediation connecting people who have money with those who need it.
In Nigeria, banks are regulated by the Central Bank of Nigeria (CBN) through the Banking and Other Financial Institutions Act (BOFIA). Listed banks also fall under the oversight of the Securities and Exchange Commission (SEC); while trading and disclosure are supervised by the Nigerian Exchange Group (NGX).
A major turning point came in 2004 when the former CBN Governor Charles Soludo raised the minimum capital requirement from N2 billion to N25 billion, forcing a wave of mergers that left stronger, more capitalized institutions.
Two decades later, in 2024, the CBN raised the bar again, with new minimum capital thresholds ranging between N250 billion and N500 billion. This moves underscores just how central banks remain to Nigeria’s financial system and capital markets.
For investors, banks are attractive because of their profitability, dividend payouts, and market liquidity. The sector routinely pays hundreds of billions of naira in dividends and accounts for trillions in market capitalization on the NGX.
In this article, we explain how to approach investing in Nigerian bank stocks.
Currently, about 13 banks are listed on the Nigerian Exchange. Like individuals, these banks are not all equal.
Note: Jaiz is the only non-interest (Islamic) bank among the listed players. Some banks operate internationally, some are local, and a few are regional.
For this article, we focus strictly on the publicly listed banks.
As of December 2024, Nigerian listed banks collectively controlled assets worth about N169.48 trillion, up from N112.39 trillion in 2023.
Assets matter because they reflect the scale of deposits (liabilities) and loans (assets) that drive bank earnings.
From a market perspective, by July 2025, banks had a combined market capitalization of N16.28 trillion, roughly N6 trillion higher than year-end 2024.
Banking stocks are also among the most liquid on the NGX consistently ranking in the top five traded stocks. For investors, this liquidity makes it easier to buy and sell shares quickly.
Unsurprisingly, the FUGAZ banks dominate on key indicators like total assets, gross earnings, and customer deposits.
Access Holdings leads in total customer deposits, while Zenith commands the largest retail deposit base, an edge that provides access to cheaper funding.
Access Holdings leads in total customer deposits, while Zenith commands the largest retail deposit base, an edge that provides access to cheaper funding.
Smaller banks can still be rewarding, but investors must weigh the risks more carefully.
Nigerian banks earn income from multiple streams:
When buying bank stocks, investors must consider risk. The biggest is credit risk borrowers defaulting on loans. This is measured by the Non-Performing Loan (NPL) ratio.
To safeguard the system, the CBN enforces prudential ratios such as:
Key Takeaway – For investors, banks with lower NPLs and higher CARs signal stronger resilience.
Profitability is at the core of why investors buy bank stocks. Profits drive dividend payments, which remain a key attraction in the Nigerian market.
Takeaway: Look for consistency. A high one-off dividend is nice, but sustainable payouts signal long-term reliability.
Beyond profit size, check how efficiently banks use their capital. Return on Equity (ROE) is a useful metric here.
Valuation: Knowing if it’s cheap or expensive
Before deciding which bank stock to buy, investors must look at valuation. Key ratios include:
Takeaway – Always compare a bank’s ratios to the sector average.
Investors can buy bank stocks directly from the NGX through licensed stockbrokers or via online/mobile trading apps. On the NGX indices:
The banking sector remains one of the most profitable and liquid on the NGX. Its consistent dividend history makes it attractive to income investors, while its growth and scale appeal to long-term investors.
Still, risks abound. Banks are tightly regulated by the CBN, and policy changes whether in FX, interest rates, or capital rules can swing profits sharply.
Bottom line: For dividend stability, Tier-1 banks are the safest bets. For higher risk-reward potential, smaller Tier-2 banks like Fidelity, Wema, or Sterling may appeal but they require more scrutiny.
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