Nigerian banking stocks have experienced a significant surge since January 7, with the NGX Banking Index rising 12.24% as of February 14.
This uptrend is largely driven by several major lenders raising over ₦1 trillion ($662 million) from the stock market to meet new capital requirements.
GTCO’s share price has increased by 12.90% since January 7, closing at ₦63.45 on February 14. Zenith Bank’s shares have also risen by 4.03% since announcing its capital raise, closing at ₦51.60.
The rally in banking stocks is part of a broader trend of renewed investor confidence in Nigeria’s economy. Despite global market volatility, Nigeria has attracted foreign investment, bolstered by currency reforms and other measures aimed at stabilizing Africa’s largest economy.
The Central Bank of Nigeria’s (CBN) decision to raise the minimum capital threshold for banks has prompted major lenders to tap the stock market for additional funding.
GTCO has raised ₦209 billion, while Zenith Bank has secured ₦350.4 billion. Other financial institutions have also raised funding, pushing the total above ₦1 trillion.
Market analysts attribute the surge in banking stocks to expectations of improved profitability and stability in the sector. With additional capital, banks are better positioned to expand lending and improve their balance sheets.
However, industry experts caution that sustaining the rally will depend on macroeconomic stability and regulatory clarity.
