Nigeria’s banking sector might be a big beneficiary as inflation decelerates, and markets anticipate a cut in the Monetary Policy Rate (MPR).
So far in 2025, the NGX Banking Index has rallied from 7% in Q1 to 18% by June, and surged to 48% as of August 15, adding about N6 trillion ($3.9 billion) in market value.
Yet, much of this rally has been driven by strong earnings expectations in H1 2025 and investor inflows, suggesting that a rate cut, if delivered, could provide additional upside that is not fully priced in.