The NGX Pension Broad Index, which tracks pension-compliant equities on the Nigerian Exchange, recorded a return of 59.72 per cent in 2025, outperforming the broader market as measured by the NGX All-Share Index.

Data from the Exchange showed that the Pension Broad Index closed the year at 2,917.84 points, rising from 1,826.89 points at the end of 2024. In comparison, the All-Share Index gained 51.19 per cent over the same period, highlighting the stronger performance of equities eligible for pension fund investment.

The Pension Broad Index comprises stocks that meet the investment eligibility criteria set by the National Pension Commission, making it a benchmark for Pension Fund Administrators seeking to comply with regulatory requirements while pursuing competitive returns.

The index includes a diversified mix of equities across key sectors such as financial services, telecommunications, consumer goods, industrials and energy. Analysts said this broad sectoral exposure helped support performance during a year marked by strong market activity and improved investor sentiment.

The Pension Broad Index outperformed the All-Share Index by more than 850 basis points in 2025, reinforcing the capacity of pension-compliant equities to deliver strong, risk-adjusted returns over the long term.

Market analysts noted that the performance underscores the growing influence of pension assets in Nigeria’s capital market, as well as the role of transparent, rules-based indices in supporting portfolio construction and long-term retirement planning.

The Nigerian Exchange said it will continue to engage with the National Pension Commission and Pension Fund Administrators to promote market education, data analytics and the development of pension-focused investment products aimed at deepening participation in the equities market.

Three bank mergers are anticipated early this year as lenders scramble to comply with the Central Bank of Nigeria’s new minimum capital requirements before the 31 March 2026 recapitalisation deadline.

This projection was made by the rating firm, DataPro, in its 2026 Banking Sector Prospects in Nigeria, as it also highlighted some of the threats to the sector.

By the end of 2025, most tier-1 institutions had already met the new capital threshold, and more have announced that they have met the target MCR in this New Year, leaving smaller banks under mounting regulatory and market pressure to shore up their balance sheets.

Analysing the banking sector prospects for 2026, DataPro’s in-house expert and analyst on Enterprise Risk Management, Idris Shittu, posited, “By the end of 2025, major banks will have successfully met the minimum capital threshold required by the Central Bank of Nigeria. Meanwhile, Tier-2 banks are under increasing pressure to comply, with three significant mergers expected by early 2026 as institutions scramble to meet the 31 March recapitalisation deadline.

“This regulatory push has spurred an active M&A environment, but it brings with it considerable risks. Post-merger integration challenges, including IT system harmonisation, cultural alignment, and the migration of Non-Performing Loans, could strain newly merged entities, especially among smaller banks. The looming deadline has also sparked ‘War Room’ discussions focused on deal execution and risk mitigation.”

Shittu maintained that the sector will be facing triple threats in the New Year, which demand agility and operational resilience from banks across the country. These threats include regulatory tightening, as a high Cash Reserve Ratio continues to restrict liquidity. Capital pressure as the recapitalisation deadline drives consolidation but also heightens risks around merger execution and integration and technological disruption from rapid fintech innovation, which would demand urgent modernisation and digital transformation from traditional banks to stay competitive.

The ERM expert anticipates that banks would continue to prioritise fee-based income streams over traditional lending activities to deal with the 45 per cent Cash Reserve Ratio for commercial banks. This CRR effectively sterilises nearly half of the naira deposits and severely limits liquidity.

On the disruption brought on by the agile fintechs, Shittu said, “Technology continues to reshape Nigeria’s banking sector, with fintech innovators like Moniepoint and Opay aggressively capturing market share, particularly among SMEs and retail customers. In response, 2026 is poised to become the year Nigerian banks evolve beyond traditional banking to compete as lifestyle ‘super-apps’.

“These super-apps aim to integrate services such as flight bookings, food delivery, and other daily conveniences directly into banking platforms to enhance customer retention and engagement. However, traditional banks face an agility challenge due to slow IT procurement cycles and legacy core systems, risking a continued exodus of younger users to nimbler fintech rivals. To keep pace, banks are expected to innovate rapidly, either through strategic fintech acquisitions or by spinning off autonomous digital subsidiaries capable of operating with fintech speed and flexibility.”

On the outlook for the sector in 2026, Shittu projects a decline in the number of banks in the country, saying, “By the end of 2026, the Nigerian banking industry is expected to consolidate significantly, shrinking in number. While this consolidation promises a more resilient banking system capable of underwriting larger transactions and supporting Nigeria’s ambition toward a $1tn economy, integration risks loom large.

“Past consolidation efforts, such as those in 2005, highlight the potential pitfalls of IT system failures and cultural clashes. Particularly challenging is the merger of conservative Tier-1 banks with aggressive Tier-2 acquirers, which could cause decision-making gridlock and operational disruptions.”

The expert warned that success in the consolidation phase will depend heavily on effective due diligence around asset quality and cultural fit, as well as robust post-merger integration planning.

PwC, which listed the finance sector as one of the sectors to drive growth in 2026 in its Nigeria Economic Outlook – January 2026, holds a more optimistic view of the sector.

PwC said, “Regulatory initiatives such as bank recapitalisation mandates and evolving frameworks for fintech and digital financial services are further drawing institutional interest, while secondary listings by major banks on international exchanges demonstrate growing cross-border investor engagement and confidence.

“In 2026, strong demand for modern financial products, credit expansion, and advanced risk management solutions, combined with projected capital market growth to N262tn, driven by anticipated listings of Dangote Refinery and NNPC, will deepen liquidity, attract new investors, and sustain interest across banking, fintech, and insurance.”

On the tech front, PwC added, “In 2025, banks and fintechs accelerated AI and blockchain adoption to personalise services, automate risk management, and enhance fraud detection, while major lenders deployed AI chatbots and advanced analytics to streamline operations. The insurance sector embraced insurtech, with the National Insurance Commission and fintechs collaborating on digital platforms to boost product innovation and access.

The Nigerian Exchange Limited opened the new trading week on a positive note on Monday as strong buying interest across key stocks lifted total market capitalisation by N745bn, reflecting improved investor sentiment in the equities market.

At the close of trading, the equities market capitalisation rose to N104.52tn from N103.78tn recorded at the previous session, while the All-Share Index advanced by 946.61 points, or 0.58 per cent, to close at 163,244.69 points from 162,298.08 points.

Market activity also improved markedly. A total of 1.15bn shares valued at N19.21bn were traded in 59,326 deals, representing an increase of 84 per cent in volume, a four per cent rise in turnover and a 35 per cent improvement in the number of deals compared with the preceding trading day.

Trading was broadly positive, with 128 listed equities participating in the session. Forty-nine stocks closed higher, while twenty equities ended the day lower, underscoring a bullish undertone in the market.

On the gainers’ table, E-Tranzact International topped the list after its share price appreciated by 10 per cent to close at N16.50. Red Star Express also gained 10 per cent to settle at N11.55, while McNichols rose by 10 per cent to close at N6.05. UPDC advanced by 10 per cent to N5.50, RT Briscoe added 10 per cent to close at N3.96, and Deap Capital Management and Trust appreciated by 10 per cent to end the session at N3.30 per share.

Conversely, trading closed on a weaker note for some stocks, led by Champion Breweries, which recorded the highest decline, shedding 8.51 per cent to close at N15.05 per share. Eunisell Interlinked followed with a loss of 8.01 per cent to close at N156.20, while Ikeja Hotel declined by eight per cent to settle at N36.80. Guinea Insurance dropped by 7.30 per cent to N1.27, Omatek Ventures fell by 3.12 per cent to close at N1.24, and Lasaco Assurance declined by 2.99 per cent to end the session at N2.60 per share.

In terms of trading activity, Sovereign Trust Insurance recorded the highest volume of shares traded, with over 307m units exchanging hands. Fidelity Bank followed with approximately 158 million shares, while Linkage Assurance and Mutual Benefits Assurance also featured prominently among the most actively traded stocks.

By value, Fidelity Bank led transactions with shares worth N3.14bn traded during the session. Aradel Holdings, Zenith Bank, Eunisell Interlinked and Sovereign Trust Insurance also recorded significant value turnover, contributing to overall market liquidity.

Analysts attributed the market’s positive performance to renewed bargain hunting in select stocks, particularly in the banking and insurance sectors, as well as improved confidence following recent gains in market capitalisation above the N100tn mark.

They noted that sustained buying interest, supported by expectations of full-year corporate earnings and portfolio rebalancing by investors, could help maintain the upward momentum in the near term, although intermittent profit-taking is likely to remain.

The NGX’s strong start to the week reinforces its position as one of the best-performing markets in the region, with market capitalisation firmly above N104tn, signalling continued resilience in Nigeria’s equities market despite prevailing macroeconomic challenges.