UBA, Zenith, Access seen leading Tier-1 bank returns in 2026

United Bank for Africa, Zenith Bank and Access Holdings are projected to post the highest risk-adjusted returns among Tier-1 lenders in 2026, driven by capital gains and dividends, according to analysts at CardinalStone Research.

In the research firm Banking Strategy Report, CardinalStone projected total returns of 48.0 percent for UBA and 40.6 percent for Zenith Bank over one year.

It said returns would be supported by capital appreciation averaging 36.6 percent and dividend yields near 7.7 percent.

Access Holdings is projected to deliver a one-year total return of 92.3 percent, the highest among large lenders.

“Earnings recovery, valuation gaps, and balance-sheet repair are expected to drive performance across coverage names,” analysts said.

Zenith Bank’s earnings per share are forecast to rise to N38.70 in FY2026 from N26.82 in FY2025, supported by loan regularisation and profitability. Access trades at a price-to-book ratio of 0.4x versus an EMEA peer average of 1.3x despite a return on equity of 17.4 percent, the report said.

Analysts projected negative capital returns of 3.5 percent for Ecobank Transnational Incorporated and 1.6 percent for Stanbic IBTC.

The firm said cleaner balance sheets, lower impairments, and credit growth would support interest income in 2026. Banking stocks rose in 2025 despite concerns about the Central Bank of Nigeria ending regulatory forbearance, as margins supported earnings.

Resolution of legacy assets and restructured loans strengthened balance sheets, while lenders raised capital to meet regulatory thresholds and expand lending.

CardinalStone said Access Corp’s valuation discount reflects dividend concerns and profitability gaps relative to peers. It added that the group’s shift from acquisitions to consolidation could raise yields and efficiency. Analysts project a dividend yield of 10.5 percent for the group.

GTCO is expected to record loan growth after resolving legacy assets. Its payout ratios are projected at 32.5 percent in FY2025 and 30.0 percent in FY2026.

FirstHoldCo reported impairments of N748.1 billion in FY2025, which reduced earnings but addressed asset quality.

Analysts said softer impairments and revenue growth could support results in FY2026, though earnings per share may reflect dilution from recent share issuance. Dividend payout is projected at 10 percent.

The balance-sheet repair across banks should support credit growth and earnings through 2026. The report added that macro conditions and institutional flows may support valuation re-rating.

Among Tier-2 lenders, FCMB Group and Fidelity Bank were identified as preferred picks due to margins and funding.

“FCMB’s capital injection and repayment of high-cost liabilities are expected to support margins, while Fidelity’s asset yield of about 18.5 percent in Q3 2025 supports earnings,” it said.

The report cited ETI’s dividend pause and Stanbic IBTC’s projected yield of 5.1 percent as factors in their outlook.

Chinwe Michael

Chinwe Michael is a financial inclusion advocate and economy journalist who uses compelling storytelling to drive awareness. With a background in Banking and Finance and experience across accounting, media, and education, she applies sharp analysis and attention to detail to every piece. She simplifies complex financial and economy concepts into engaging content for Africa and global audience. Chinwe also doubles as a speaker with global recognition for her expertise.