- Ecobank, UBA and Wema Lead in Possibilities
- Tier 1 Banks Grossly Underpriced
- PEG Ratio Analysis
Wole Olajide, ACS
The business climate in 2025 is significantly tough, particularly for the banking sector and other financial services. This greatly impacted their topline and bottom-line figures in Q2 and Q3 as performance was below the previous year’s record. Earnings per share (EPS) for most banking stocks declined year on year in Q2 and Q3 respectively. This will obviously impact their EPS in Q4 as against the previous year’s performance.
The year 2025 in a matter of days will be over. Companies are expected to file their Unaudited reports within one month, and thereafter Audited report within 90 days. At that, we expect most companies to release their Unaudited Q4 2025 reports by the end of January 2026.
In anticipation for Q4 2025 results of quoted companies, it is wise for investors to start taking position ahead of these results. Expectation is the mother of all investment strategies. Investment in stocks is done against expectation and not on realities. In other words, you are buying into a company based on what you think you can get; that is expectation.
We deem it necessary to do earnings forecast for banking stocks ahead of the release of their Q4 earnings for 2025.
Our projections of Q4 earnings for banks is based on their earnings growth rate for the past 5 years and PEG ratios. PEG ratio (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings per share (EPS), and the company’s expected growth.
ACCESS HOLDINGS
The Q4 (EPS) of the Access Holdings Plc over the last 5 years has a Geometric Average Growth rate of 53.50%.
Relative to the share price of N20.50 and Q4 2024 earnings per share of N16.71, the P/E ratio of Access is estimated at 1.23x.
PEG ratio of the Holding Company against the expected Q4 2025 earnings is 0.02. PEG Ratio being less than 1 implies that Access Holdings is underpriced.
Earnings per share (EPS) of about N12.28 is projected for Access Holdings Plc in Q4 2025.
The table below shows the Earnings per share (EPS) history of the financial institution for the past 5 years. The EPS in RED is the projected EPS.
ZENITH BANK
Q4 earnings per share (EPS) of the Zenith Bank over the last 5 years has a geometric average growth rate of 45.47%.
At the share price of N63.3 and Q4 2024 earnings per share of N32.87, the P/E ratio of Zenith is calculated as 1.93x.
PEG ratio against the expected Q4 earnings is 0.04, which makes the share price of Zenith Bank underpriced at current price.
Q4 2025 earnings per share of about N27.06 is projected for Zenith Bank.
FIRST HOLDCO
Q4 earnings per share (EPS) of First Holdco Plc (formerly FBN Holdings Plc) over the last 5 years has a geometric average growth rate of 65.34%.
At the share price of N44.95 and Q4 2024 earnings per share of N18.31, P/E ratio of the Holding Company is calculated as 2.450x.
PEG ratio against the expected Q4 earnings is 0.04, which makes First Holdco underpriced at current price.
The EPS of N17.90 is projected for First Holdco against its Q4 2025 earnings release.
GTCO
Q4 earnings per share of Guaranty Trust Holding Company (GTCO) over the past 5 years has a geometric average growth rate of 49.42%.
At the current share price of N88.1 and Q4 2024 earnings per share of N35.44, P/E ratio of GTCO is calculated as 2.49x
PEG ratio against the expected Q4 earnings of GTCO is 0.05. This implies GTCO is underpriced.
Q4 2025 earnings per share of N30.94 is projected for GTCO.
UNITED BANK FOR AFRICA
Q4 earnings per share of United Bank for Africa (UBA) over the last 5 years has a geometric average growth rate of 62.71%.
At the share price of N40 and Q4 2024 earnings per share of N21.73, the P.E ratio of the UBA is calculated as 1.84.
PEG ratio against the expected Q4 earnings is 0.03; being less than 1 makes UBA underpriced.
Q4 2025 earnings per share of about N22.06 is projected for UBA.
ECOBANK TRANSNATIONAL INCORPORATED
Q4 Earnings history of Ecobank Transnational Incorporated (ETI) over the last 5 years has a geometric average growth rate of 95.96%.
At the share price of N37.9 and Q4 2024 earnings per share of N20.20, the P.E ratio of Ecobank is calculated as 1.88x.
PEG ratio against the expected Q4 earnings is 0.02 and this implies that Ecobank is underpriced.
Q4 2025 earnings per share of about N24.03 is projected for Ecobank.
FIDELITY BANK
Q4 earnings per share of Fidelity Bank over the last 5 years has geometric average growth rate of 75.41%.
At the share price of N19 and Q4 2024 earnings per share of N6.65, the P.E ratio of Fidelity Bank is calculated as 2.86x.
PEG ratio against the expected Q4 earnings 0.04.
Q4 2025 earnings per share of N7.40 is projected for Fidelity Bank.
WEMA BANK
Q4 Earnings history of Wema Bank over the last 5 years has a geometric average growth rate of 91.20%.
At the share price of N19.10 and Q4 2024 earnings per share of N4.83, P.E ratio of Wema Bank is calculated as 3.95x.
PEG ratio against the expected Q4 earnings is 0.04.
Q4 2025 earnings per share of about N7.80 is projected for Wema Bank.
FCMB
Q4 earnings per share of FCMB over the last 5 years has geometric average growth rate of 25.87%.
At the share price of N10.60 and Q4 2024 earnings per share of N2.46, P.E ratio of FCMB is calculated as 4.31x.
PEG ratio against the expected Q4 earnings is 0.17.
Q4 2025 earnings per share of N4.92 is projected for FCMB.
STANBIC IBTC
Q4 Earnings history of Stanbic IBTC Holdings over the last 5 years has a geometric average growth rate of 28.61%.
At the share price of N95.2 and Q4 2024 earnings per share of N17.10, P.E ratio of Stanbic IBTC is calculated as 5.57x.
PEG ratio against the expected Q4 earnings is 0.19.
Q4 2025 earnings per share of about N22.30 is projected for Stanbic IBTC.
STERLING BANK
Q4 earnings per share of Sterling Bank over the last 5 years has geometric average growth rate of 40.27%.
At the share price of N7.1 and Q4 2024 earnings per share of N1.51, the P.E ratio of Sterling Bank is calculated as 4.7x.
PEG ratio against the expected Q4 earnings 0.12.
Q4 2025 earnings per share of N1.80 is projected for Sterling Bank.
