CBN Stress Test Hits Banking Stocks as Dividend Suspensions Bite
By Aboki Forex —
Nigeria’s banking sector is feeling the heat from the Central Bank of Nigeria’s stress test, with several major lenders suspending dividend payments. Financial analyst Bismarck Rewane said the exercise has triggered moderate corrections in the sector.
Banks That Paid Dividends
According to a presentation by Rewane, banks that passed the stress test and paid dividends for the 2025 financial year include GTCO, Zenith Bank, Stanbic IBTC and Wema Bank. GTCO declared a dividend of N11.76 per share. Zenith Bank paid N8.75 per share. Stanbic IBTC paid N4.00 per share. Wema Bank declared N1.25 per share.
Dividend Suspensions Bite
But several lenders could not pay dividends after being forced to make large provisions against potential losses. They include Access Bank, First Bank, Fidelity Bank, FCMB, Ecobank and UBA. Rewane said the suspension of dividends has reduced expected returns for investors and weakened banking stocks. “The CBN suspended dividend payments for most of the banks, reducing investor expected returns,” he said.
The presentation also showed that investor sentiment has been hurt by fears of additional provisioning requirements linked to oil-sector exposures. Rewane noted that the Supreme Court’s decision overturning the Nestoil asset freeze could force lenders to reassess about $1.1 billion in oil-related debt. That could increase provisioning needs for affected banks.
Capital Rotation and Dangote IPO
Capital has been rotating away from some banking stocks toward companies with stronger dividend prospects. Investors are also repositioning ahead of the anticipated Dangote Refinery initial public offering. It is expected to become one of the largest listings in Nigerian capital market history. Rewane said the shift in investor behaviour shows a growing focus on dividend certainty and balance-sheet strength.
He argued that while the stress test has weighed on some institutions, it ultimately strengthens confidence in the banking sector. It forces lenders to recognise risks early and maintain stronger capital positions. He added that banking stocks could remain under pressure in the short term as investors assess the implications of dividend restrictions, provisioning requirements and evolving regulatory expectations.