The analysts at Coronation Asset Management have projected increased capital market activities as banks push to meet the March 2026 recapitalisation deadline set by the Central Bank of Nigeria.

This was disclosed in its Year in Review and 2026 Outlook published on Tuesday.

According to the CBN, 16 banks have met the new capital thresholds, with the others expected to do the same in the weeks leading up to the expiration of the deadline.

Commenting on the process and its impact on the sector in the outgone year, the report read, “The defining theme has been the industry-wide recapitalisation drive, spurring a series of capital market activities as banks race to meet the March 2026 deadline. The exit from the CBN’s forbearance scheme has also had a significant effect in the second half of the year. While investor sentiment has been mixed, leading to sector underperformance relative to the broader market, the outlook is anchored by this strengthening of capital bases and an expected normalisation of earnings towards core banking activities in 2026.”

“Most Tier-1 and some Tier-2 banks, including GTCO, Zenith, UBA, Stanbic IBTC, Jaiz, and Access Holdings, have completed their capital-raising programmes through rights issues, public offers, and private placements. While others like FCMB, FBN Holdings, Fidelity, and Sterling have CBN approval for multiple offers already in place or in the pipeline.

With about three months to go, we expect to see more capital market activities and final calls on capital raise programmes.”

On the profitability front, the analysts affirmed that the Nigerian banking sector remained broadly resilient through 2025, supported by strong balance sheet expansion and solid liquidity, but headline profitability softened.

“High funding costs, rising impairments, and regulatory changes, including forbearance withdrawal, the windfall tax on foreign exchange gains, and the ongoing recapitalisation drive, have impacted the sector. Profitability has risen more softly compared to last year’s record earnings, with industry pre-tax profit rising by 5.2 per cent year-on-year. This smaller growth is due to a combination of higher loan-loss provisions, higher operating costs amid persistent inflationary pressures and elevated interest rates.”

It added, “Manufacturing and trade-related exposures have accounted for a notable share of the increase in impairments, as import-dependent borrowers contend with tighter FX access and elevated input costs. Meanwhile, the oil and gas upstream segment has shown relative resilience, supported by improved crude prices and stronger cash flows so far in the year. In contrast, downstream and power sector loans have seen lower recovery due to rising receivables and delayed tariff adjustments.”

At the capital market, the NGX Banking Index advanced by over 30 per cent year-to-date, but it underperformed the broader NGX All-Share Index, which is up over 50 per cent.

The experts adjudged the sector’s performance to be mixed, reflecting divergent investor sentiment across Tier-1 and mid-tier banks.

“Among the large caps, Zenith Bank (+39.6 per cent ytd), Guaranty Trust Holding Co (+55.1 per cent ytd), Ecobank Transnational Inc (+30.4 per cent ytd), and United Bank for Africa (+17.1 per cent ytd) posted solid gains, supported by strong earnings fundamentals, robust capital positions, and dividend declarations.

“Mid-tier names showed stronger momentum, with Wema Bank (+104.4 per cent ytd), Stanbic IBTC (+82.3 per cent ytd), and Sterling Financial Holdings (+31.3 per cent ytd) recording substantial year-to-date gains, driven by improved profitability and investor rotation into value plays. In contrast, Access Holdings (-12.8 per cent ytd) lagged due to a delay in H1 earnings result publication and uncertainty around dividend payments,” said the firm.

On the outlook for the New Year, Coronation Asset Management said it is anticipating policy rate cuts, which should stimulate lending activity, “while disciplined credit management, improved asset yields, and growth in fee-based income are expected to underpin a gradual recovery in interest income and overall sector performance. We believe the sector is well-positioned to become a major driver of growth in 2026 as macroeconomic stability gradually returns. Improving inflation dynamics, better FX liquidity, and a less volatile interest-rate environment should ease pressure on funding costs and risk assets.

“While declining yields may temper margins, stronger core earnings, expanding loan books, and improved capital flexibility are expected to support profitability and balance sheet growth. With regulatory cleanup largely behind the sector and capital buffers strengthening, banks are better placed to scale lending, support investment activity, and deliver more durable value creation over the medium term.”

The Petroleum Products Retail Outlets Owners Association of Nigeria has demanded that authorities fully account for an estimated N11.35tn reportedly spent on the rehabilitation of state-owned refineries, warning that continued opacity undermines confidence in the petroleum sector and worsens the country’s energy insecurity.

In its review of Nigeria’s petroleum sector for 2025 and prospects for 2026, signed by the National President, Billy Gillis-Harry, and the spokesman, Joseph Obele, PETROAN said that despite years of heavy public spending on refinery rehabilitation, the facilities have remained largely non-functional or underperforming.

The association stated, “Over the past decade, massive public funds, reportedly around N11.35tn, have been expended on turnaround maintenance and rehabilitation of the four government-owned refineries (Port Harcourt, Warri, and Kaduna), yet the facilities largely remain non-functional or underperforming.”

PETROAN emphasised, “Transparent tracking of funds borrowed and spent must be prioritised. Full forensic audits are essential to restore confidence in public investments. Clear accountability frameworks must be enforced to prevent further waste of public resources.”

It disclosed that approved contracts included “Port Harcourt Refinery: $1.5bn, and “Warri & Kaduna Refineries: Combined $1.48bn,” noting that the scale of expenditure had heightened concerns across the downstream sector.

According to PETROAN, “These significant outlays, coupled with the enduring non-operational status of the refineries, have prompted investigations by security agencies and legislative oversight bodies into allegations of fraud, mismanagement, and lack of accountability.”

The association said transparency must be prioritised, stressing that “Transparent tracking of funds borrowed and spent must be prioritised.” It added that “Full forensic audits are essential to restore confidence in public investments,” while insisting that “Clear accountability frameworks must be enforced to prevent further waste of public resources.”

PETROAN linked the refinery failures to broader downstream challenges in 2025, including supply constraints and increased dependence on imports.

It noted that the Port Harcourt Refinery, Nigeria’s largest state-owned refining complex, “was shut down on May 24, 2025, after a short period of production, following persistent operational challenges, mechanical failures, and the inability to sustain stable commercial production after rehabilitation efforts.”

The association warned that the shutdown has continued to constrain domestic refining capacity, increasing reliance on imported petroleum products and intensifying pressure on foreign exchange demand and pump prices.

It also expressed concern over the social impact of the closure, stating that “Most worrisome is the fact that the refinery shutdown has brought hardship to members of the host communities.”

Beyond refinery challenges, PETROAN said the downstream market was destabilised by intense price competition in 2025. It stated that “the downstream sector experienced intense price competition between petroleum importers and local refiners,” adding that “this price war led to frequent pump price adjustments resulting to loses of billions of naira to our members, market uncertainty, and reduced margins for retail outlet operators.”

While acknowledging short-term consumer relief, the association said “long-term sustainability and investment confidence were negatively affected.”

PETROAN also reviewed the Naira-for-Crude policy introduced to support domestic refining, noting that “approximately 250,000 – 300,000 barrels per day of crude oil were allocated to domestic refineries under this policy.”

It said the initiative “helped ease foreign exchange demand for petroleum importers and supported local refineries with steady crude feedstock,” but added that its effectiveness was limited by operational issues.

The association observed that “Implementation gaps, delays, and inconsistencies in crude allocation affected refinery operations, while pricing disputes and supply constraints also weakened the policy’s impact.

On crude oil production, PETROAN noted a modest recovery in 2025, with output at “Approximately 1.3 – 1.5 million barrels per day, including condensates,” but stressed that production remained below Nigeria’s OPEC quota due to persistent oil theft and pipeline vandalism, aging infrastructure and operational inefficiencies, and limited upstream investment and funding constraints.

The association said “increased crude production is critical for sustaining domestic refining, improving foreign exchange inflows, and ensuring downstream supply stability.”

Looking ahead to 2026, PETROAN said improved product availability was expected but warned that affordability would depend on exchange rate stability, crude supply consistency, and regulatory balance.

The association reiterated its recommendations, including refinery privatisation, transparent crude allocation, continuous stakeholder engagement, and accountability in public investments, stating that these measures were necessary to stabilise the sector.