Zenith Bank Price Target Raised to ₦97.86 as Outlook Lifted on Potential Return to FTSE Index

Tier-One Nigeria lender Zenith Bank has seen its stock price target raised to N97.86 a share as Nigeria is being considered by FTSE Russell for a potential return to Frontier Market status, following its 2023 downgrade.

This move by the global index provider underscores the ongoing improvements in the country’s foreign exchange (FX) market.

“A successful reinstatement would not only be positive for the broader market but would also reinforce our conviction that Zenith Bank—previously included in the index—stands to benefit meaningfully,” Cardinal Stone Partners analysts led by Philip Anegbe said in a November 20 note to clients.

“We expect its return to FTSE Russell coverage to strengthen the case for a re-rating of the counter toward valuation levels closer to its EMEA peers.”

Following updates to its model, Cardinal Stone revised its 12-month Target Price (TP) for Zenith Bank to N97.86, implying a 64.5% potential upside from the current market price of N59.50 and reinforcing its BUY recommendation.

Zenith Bank unwinds forbearance loan positions

Cardinal Stone notes that Zenith Bank has implemented one of the most rigorous measures in its history to comply with the Central Bank of Nigeria’s (CBN) directive on the unwinding of forbearance positions.

The financial impact of this exit was significant, with the Group recognizing N781.5 billion in impairment charges on financial assets in the 9 Months (9M) 2025 period, representing 39.3% of its Full Year (FY) 2024 pre-provision operating profit.

Of this amount, impairments on loans accounted for 98.5% with substantial write-offs, which have also weighed on loan growth, resulting in an 8.9% year-to-date (YtD) contraction in gross loans in 9M’ 2025.

Healthy margins supports stronger Zenith Bank core earnings

Despite the 6.9% year-on-year (YoY) contraction in the third quarter (Q3) 2025 profit after tax (PAT) to N232 billion, the Zenith Bank Group is on track to deliver a robust N1.1 trillion PAT by FY 2025, according to Cardinal Stone.

The financial performance is expected to ride on the stellar performance of Zenith Bank’s core earnings.

Cardinal Stone projects a 49.3% YoY increase in Net Interest Income (NII) to N2.6 trillion in FY’25, driven by a 2.0 percentage point (ppt) expansion in Net Interest Margin (NIM) to 12.1%.

As the tides turn on interest rates with the expected dovishness of CBN, they see NIM moderating over a 5-year forecast horizon to an average of 10.0%, from 12.1% in FY 2025 year-end.

This slowdown in Net Interest Margin should result in a tempered growth in Net Interest Income over the next half decade.

“We retain an optimistic outlook on Zenith Bank. The Group’s demonstrated capacity to outperform on trading gains (5-year compound annual growth rate CAGR of 6.1% ex FY 2023 and FY 2024) is particularly notable. This track record combined with digital banking-induced robust expectation for fee and commission income (5-year CAGR of 15.6%) should support bottom-line expansion and profitability margins,” Anegbe said.

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