NGX Banking Index Declines 1.66% In March

The Nigerian Exchange (NGX) Banking index delivered a mixed but modest 1.66 per cent month-on-month (m-o-m) decline, making it one of the weakest sectoral performances on the All-Share index.

Meanwhile, the Nigerian Exchange delivered a modest performance in March 2026, marking the fourth consecutive month of gains for the equities market, despite some late-session profit-taking. The All-Share Index (ASI) increased by 4.39 per cent over the month, pushing the year-to-date return for the first quarter to about 29.35 per cent, with total market capitalisation expanding to roughly N129.2 trillion.

The month initially rode on the wave of ranking stocks, which benefited from positive momentum built on the ongoing CBN recapitalisation exercise, which ended in March.

Banks had raised well over N4 trillion in fresh capital industry-wide, and by late March, the vast majority, around 32 to 34 institutions, had comfortably met or exceeded the new minimum capital thresholds (N200 billion for national licences and N500 billion for international ones). This was fundamentally bullish, strengthening balance sheets and boosting investor confidence, resulting in a 22.75 per cent year-to-date (YTD) return.

Comercio Partners Limited stated that “by the end of the month, the narrative shifted towards profit-taking as those who positioned early for the recapitalisation event began to take profit. Sentiment weakened toward the month-end as investors turned to profit taking, and the banking index recorded the steepest weekly decline of 2.47 per cent in the week ended March 27, 2026 dragged lower by FCMB Group, Zenith Bank, First HoldCo, United Bank for Africa (UBA) and Wema Bank.

“With the recapitalisation process over and the next deadline for the bank’s stress test to be concluded by the end of April, focus will shift to the ‘execution phase’, in which banks will deploy the stronger capital base through expanded lending, digital innovation, and non-interest income growth.

However, we expect a mild to bearish tone with some volatility as attention shifts to capital deployment.”

On outlook, the Firm noted that “with the recapitalisation deadline behind us, attention shifts to Q1 2026 results and post-recap growth strategies.

Compliant banks with strong capital bases and clear lending pipelines are poised for re-rating. Dividend declarations from full-year 2025 earnings will also provide support to the Banking/Financial Services.

Also, Cardinalstone Partners Limited stated that “the local bourse is expected to maintain its positive streak this month, driven by positive earnings and dividends. The Oil & Gas and Banking sectors are likely to be the main drivers of market performance as investors expect elevated oil prices in Q1, 2026 to drive improved earnings for upstream companies, while dividend announcements, particularly in banking stocks, should spur investor activity in the sector.”