Nigeria’s mid-tier banking groups are emerging as some of the strongest earnings performers in the first half of 2026, with FCMB Group, Wema Bank, and Sterling Financial Holdings posting double-digit growth in after-tax profit, helping to offset a decline at Ecobank Transnational Incorporated (ETI).
Analysis of the H1 2026 results of the four listed banking groups shows that their combined after-tax profit rose to N730.2 billion, from N636.4 billion in H1 2025, representing an increase of about 14.7 percent.
The earnings expansion was driven primarily by FCMB Group, whose profit surged 90.5 percent to N139.8 billion, Wema Bank, which recorded a 50 percent increase to N131.3 billion, and Sterling Financial Holdings, whose profit rose 20.6 percent to N50.3 billion.
ETI, however, bucked the trend, with profit after tax declining 5.8 percent to N408.8 billion from N433.8 billion a year earlier.
The divergent performance highlights a changing earnings landscape in Nigeria’s banking industry, where stronger loan growth, higher interest income, and diversified revenue streams are supporting smaller lenders, while some larger regional banking groups are facing pressure from weaker non-interest income and higher impairment charges.
Meristem Research’s July banking review shows that the sector entered the second half of the year with improving investor sentiment, with the Nigerian Banking Index rising 22.10 percent month-on-month in July, reversing the profit-taking seen in June.
FCMB leads profit growth
FCMB Group recorded the strongest year-on-year profit expansion among the four banks analysed, with after-tax profit rising from N73.4 billion in H1 2025 to N139.8 billion in H1 2026.
Its gross revenue also climbed from N530 billion to N680 billion, reflecting stronger earnings generation during the period.
Meristem’s banking metrics put FCMB’s H1 2026 gross earnings at N667.26 billion, interest income at N600.52 billion, and non-interest income at N66.74 billion. The group reported N139.86 billion in profit after tax, while loans to customers stood at N2.49 trillion and deposits at N4.92 trillion.
The bank’s H1 performance comes against a broader environment in which lenders are seeking to convert the benefits of higher interest rates and balance-sheet expansion into stronger earnings.
Wema sustains rapid earnings growth
Wema Bank also delivered a strong first-half performance, with after-tax profit increasing from N87.5 billion in H1 2025 to N131.3 billion in H1 2026, a 50 percent rise.
Gross revenue increased from N303 billion to N415 billion, indicating that the lender was able to translate revenue growth into a substantial improvement in bottom-line earnings.
Meristem’s data show Wema generated N415.09 billion in gross earnings, including N342.64 billion in interest income and N72.45 billion in non-interest income. Its impairment charge was just N830 million, while loans to customers reached N2.12 trillion and deposits stood at N3.45 trillion.
The relatively low impairment charge compared with the other banks in the group helped support profitability.
Sterling grows earnings despite rising credit costs
Sterling Financial Holdings increased after-tax profit by 20.6 percent, from N41.7 billion in H1 2025 to N50.3 billion in H1 2026.
Gross revenue rose from N212 billion to N279 billion, representing growth of about 31.6 percent.
Meristem attributed Sterling’s H1 performance largely to stronger core banking income. Gross earnings rose 27.84 percent year-on-year to N279.60 billion, driven by a 33.75 percent increase in interest income to N223.58 billion.
The growth was supported by a 35.87 percent year-to-date increase in loans and advances and an improvement in average asset yield to 7.15 percent from 6.09 percent.
However, the earnings improvement came with rising risks. Net impairment charges increased by 357.48 percent to N23.85 billion, while interest expense rose 23.57 percent to N86.18 billion.
Meristem consequently warned that elevated impairment charges and rising funding costs remain key downside risks to Sterling’s earnings momentum in the second half.
Ecobank buckles under non-interest income pressure
ETI remained the largest profit contributor among the four banks, but was the only one to record a decline in earnings.
Its after-tax profit fell from N433.8 billion in H1 2025 to N408.8 billion in H1 2026, representing a 5.8 percent decline.
Despite the profit contraction, gross revenue was broadly stable, increasing marginally from N2.30 trillion to N2.31 trillion.
Meristem said ETI’s interest income increased 2.32 percent year-on-year to N1.52 trillion, supported by an 18.14 percent increase in interest income from treasury bills.
However, non-interest income declined 5.81 percent to N732.90 billion, with trading income falling 10.42 percent and other operating income dropping 23.74 percent. At the same time, impairment charges increased 24.50 percent.
The result was a decline in profitability metrics, with ETI’s return on equity falling to 17.71 percent from 18.81 percent and return on assets declining to 10.80 percent from 11.99 percent.
Banking stocks rally ahead of earnings
The strong earnings performances of several banks coincided with a sharp recovery in banking stocks on the Nigerian exchange.
According to Meristem, the Nigerian Banking Index gained 22.10 percent in July, supported by strong institutional buying in Tier-1 names and anticipation of H1 2026 results and interim dividend announcements.
First HoldCo was the standout performer, with its share price rising 131.13 percent month-on-month, while Zenith Bank gained 12.22 percent and GTCO rose four percent. FCMB, which had enjoyed a strong June rally, fell 13.91 percent in July as investors took profits.
The rally reflects what Meristem described as a ‘flight to quality’ by domestic institutional investors, who are positioning for earnings growth and dividend opportunities.
Recapitalisation could reshape second-half growth
The banking sector is also entering the second half with the recently completed recapitalisation exercise expected to provide lenders with additional capacity to expand their balance sheets.
Meristem expects banks to deploy fresh capital toward strengthening their capital bases, technology investment, and increased lending to the real sector. It also expects the still-high interest-rate environment to continue supporting bank earnings through the rest of 2026.
‘For investors, however, the H1 results point to a widening performance gap across the sector. While FCMB, Wema and Sterling demonstrated that aggressive balance-sheet growth and core banking income can still drive substantial profit expansion, ETI’s results show the vulnerability of banks with greater exposure to volatile non-interest income and rising impairment costs,’ the report disclosed.
With more Tier-1 banks expected to release their H1 results and dividend qualification dates approaching, Meristem expects banking stocks to remain a major focus of investors in August.