Why Wema May Emerge Best-Performing Banking Stock in 2025

Wema Bank Plc may emerge as the best-performing banking stock in 2025 on the Nigerian Exchange Limited (NGX).

A review of the NGX stock market data by Pinnacle Daily, from the beginning of the year to the end of November, points in this direction.

It shows Wema Bank as the only bank that has crossed the 100 per cent mark, posting a 101.1 per cent year-to-date (YtD) return.

Stanbic IBTC Holdings follows at 82.29 per cent, while Jaiz Bank and Guarantee Trust Holding Company (GTCO) also show strong performance at 55 per cent and 51.5 per cent, respectively.

Zenith and Sterling lead moderate performers

Zenith Bank, Sterling Financial Holdings Company and Ecobank Transnational Incorporated (ETI) seem to be performing moderately and show healthy gains.

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The Ytd return of Zenith Bank’s stock stood at 31.87 per cent, Sterling at 27.6 per cent, and ETI at 23.75 per cent.

FCMB Group, First HoldCo, Fidelity Bank and United Bank for Africa (UBA) fall in the single- to mid-double-digit positive returns range.

FCMB posts 14.89 per cent, FirstHoldco 10.7 per cent, Fidelity 9.14 per cent and UBA 7.21 per cent in their YtD returns, respectively.

Lowest performer with a negative return

A cursory look at the NGX market data shows that Access Holdings Plc is the only bank with a negative return, posting a -11.95 per cent YtD return as of the period under review.

Waning sentiment in the market

Regarding the banking stocks’ performance since the beginning of the year, an investment and portfolio analyst, Abel Ezekiel, explained to Pinnacle Daily that up till the mid-year, most of the banking stocks were doing very well.

Specifically, Wema, GTCO, Stanbic IBTC, Zenith and even UBA stocks were doing quite well in the market, he noted. “At a point, Access Bank joined the league.”

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“They were having a good run, a good rally in the market, but along the line, a decline started to be noticed when the release of their half-year results was delayed.”

He expressed concern that many of the banks’ financial performances were not forthcoming at the time expected, and this delay even dragged towards September before GTCO, Zenith and UBA released their results.

“Of these three banks, even though their top-line and bottom-line performance were impressive, it’s only Zenith Bank that increased the shareholders’ interim dividend.

“Last year, Zenith Bank did an N1 dividend, and this year, N1.25k. For GTCO, it was the same N1 while UBA was the worst of them, as in that regard, it did 25 kobo, far below what the bank paid last year,” Ezekiel noted.

He pointed out that between May and July, equities were generally impressive.

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He said it was from September to October that most of the stocks began to decline, resulting from a number of issues, including the capital gains tax (CGT).

The portfolio analyst recalled that on a particular date in November, the market lost about N5 trillion as investors feared that they might lose money when the tax reform kicks off in January 2026.

He noted, in addition, that the fear of US President Donald Trump’s threat to invade Nigeria because of insecurity also creates fear in the market.

All these factors impacted investors’ sentiments and what we are seeing in the banking stocks, Ezekiel said. “No equities were exempted. These were the many factors negatively impacting the market.”

Speaking specifically on the negative YtD return on Access Holdings stock, he said, “Access Bank was among the banks expected to pay an interim dividend to shareholders, but so far they have not declared.

“So, investors will naturally react to that. Even Fidelity Bank has not declared.”

He recalled that Fidelity Bank did a public offer and rights issue of shares last year at above N9 and rose to about N21, meaning its share price appreciated about 100 per cent.

But when there are no incentives for new investors who come in or even for existing investors, naturally, those who bought the offers and have seen their shares rise by about 100 per cent will take their profit.

“As we speak, the investment climate in the market is really down. The sentiment is low. I can tell you that now it is not really a good time for investors in the market,” Ezekiel maintained.

Stressing the issue surrounding the CGT, he again recalled that the visit of the Minister of Finance and Coordinating Minister of Economy, Wale Edun, gave investors some assurance that the government would look into their concerns, which slightly helped the market rebound at the time, but things appear to have returned to where they were before he visited.

“These are the factors impacting the market: fear of insecurity, foreign investors exiting the market, the issue of capital gains tax that has not really been fully addressed, and no incentive or interim dividend payment to shareholders by many of the banks.

“We can only hope that something positive will bring a new rebound in the market. But as we speak now, generally the investment climate in the market is really done, and the sentiment is low,” Ezekiel added.