Banking sector faces mixed YTD performance amid recapitalisation, economic pressures

By Esther Agbo

As the Nigerian banking sector navigates the twin challenges of recapitalization and economic volatility, notable institutions like Sterling Bank and Stanbic IBTC have recorded year-to-date (YTD) returns of 22.67 percent and 18.16 percent, respectively, reflecting a downward trend in their performance.

This dip in returns underscores the tough operating environment banks are contending with.

Analysts suggest that while market instability has affected investor confidence, the recapitalisation exercise, a regulatory necessity to strengthen banks’ capital base, has also exerted short-term pressure on the sector.

However, both Sterling and Stanbic IBTC, despite the drop, continue to play pivotal roles in the banking landscape.

In contrast, some competitors have reported positive YTD returns, banks like Guaranty Trust Holding Company (GTCO) and Fidelity Bank showed resilience, with GTCO, ETI, FBNH, and UBA’s achieving a 20.99 per cent, 14.83 percent, 10.40 percent, and 3.31 percent respectively, and Fidelity Bank leading the sector with a robust 35.48 percent, buoyed by favourable H1 2024 results.

Meanwhile, Wema Bank and FCMB also saw solid performances, posting YTD returns of 40.18 percent and 14.86 percent, respectively.

However, not all institutions experienced an upward trajectory. Access Holdings Plc, despite improving, remains in negative territory with a -14.95 percent YTD return, which may raise concerns among stakeholders.